PCAOB Sanctions Five Audit Firms for Regulatory Violations

The Public Company Accounting Oversight Board (PCAOB) has taken disciplinary action against five audit firms for various regulatory violations, imposing a total of $165,000 in fines along with censures and remedial undertakings.

Four of the firms were sanctioned as part of an ongoing enforcement sweep targeting violations related to required communications with audit committees. The fifth firm was penalized for failing to report a disciplinary proceeding to the PCAOB as required.

PCAOB Chair Erica Y. Williams emphasized the Board's commitment to accountability, stating, "The PCAOB will continue to hold firms accountable for providing audit committees, the PCAOB, and the public with important information to help keep investors protected."

The four firms sanctioned for audit committee communication violations are:

1. Accell Audit & Compliance, P.A. - $40,000 fine
2. Crowe MacKay LLP (Canada) - $30,000 fine
3. Ernst & Young AG (Switzerland) - $45,000 fine
4. Grant Thornton LLP (Canada) - $30,000 fine

These firms were found to have violated PCAOB standards AS 1301 (Communications with Audit Committees) and/or Rule 3524 (Audit Committee Pre-approval of Certain Tax Services). Additional violations by some firms included failure to document audit committee pre-approval of certain services and failure to communicate material weaknesses in writing to an issuer's audit committee.

The fifth firm, Halpern & Associates, LLC, was fined $20,000 for failing to report the initiation of a disciplinary proceeding brought by the U.S. Securities and Exchange Commission against the firm and its namesake partner. This violation persisted for over two years, contravening PCAOB Rule 2203 on Special Reports.

Robert E. Rice, Director of the PCAOB's Division of Enforcement and Investigations, commented on the actions, "This latest round of orders shows that firms cannot neglect their responsibilities to keep audit committees informed and report required information to the PCAOB."

In addition to the monetary penalties and censures, all sanctioned firms have agreed to undertake remedial measures. These include establishing, revising, or supplementing policies and procedures to ensure compliance with PCAOB rules and standards related to the violations.

The PCAOB's enforcement actions are part of its strategic goal to strengthen oversight and protect investors. The Board continues to monitor registered firms' compliance with reporting requirements and conducts regular sweeps to identify and address violations across multiple firms simultaneously.

This latest round of sanctions follows similar actions taken by the PCAOB in February 2024, November 2023, and July 2023, underscoring the Board's ongoing commitment to maintaining high standards in the auditing profession and ensuring transparency for investors.

The GRC Report is your premier destination for the latest in governance, risk, and compliance news. As your reliable source for comprehensive coverage, we ensure you stay informed and ready to navigate the dynamic landscape of GRC. Beyond being a news source, the GRC Report represents a thriving community of professionals who, like you, are dedicated to GRC excellence. Explore our insightful articles and breaking news, and actively participate in the conversation to enhance your GRC journey.