SEC Charges Audit Firm Marcum LLP with Systemic Quality Control Failures

The SEC has charged audit firm Marcum LLP with violating several audit standards and for systemic quality control failures in connection with the hundreds of SPAC clients it audited from 2020 onward. Due to massive growth during this period, Marcum was unable to put in effective quality control measures and failed to comply with audit standards related to audit documentation, risk assessments, audit committee communication, and due professional care in 25-50% of audits reviewed by the Commission. Marcum has agreed to pay a $10 million penalty and implement extensive remedial actions including the retention of an independent compliance consultant and restrictions on the type and number of new audit clients that the firm may accept. The investigation, which is ongoing, was conducted by SEC staff and the agency appreciates the assistance of the Public Company Accounting Oversight Board.