The Public Company Accounting Oversight Board (PCAOB) has detailed a settled disciplinary order sanctioning a pair of individuals for alleged violations of PCAOB rules and standards of a China-based issuer.
According to the PCAOB, Eddie Wong, CPA and Neil W. Ehrenkrantz, CPA were sanctioned for alleged violations of PCAOB rules and standards in connection with Friedman LLP’s 2016, 2017, and 2018 audits of Kingold Jewelry, Inc., a Delaware corporation headquartered in the People’s Republic of China.
“The PCAOB means business when it comes to enforcing our standards and removing those who put investors at risk,” PCAOB Chair Erica Y. Williams said. “There will be consequences for auditors who fail to exercise due professional care and skepticism when carrying out their professional responsibilities.”
The PCAOB alleged Wong failed to obtain sufficient appropriate audit evidence concerning gold inventories pledged as collateral to secure loans from banks and financial institutions and failed to identify or evaluate significant unusual transactions entered into by the company.
Additionally, the PCAOB allegedly determined Ehrenkrantz violated AS 1220, Engagement Quality Review, by providing his concurring approval for the issuance of Friedman’s audit reports without appropriately evaluating the engagement team’s assessment of and responses to significant risks with due professional care.
Without admitting or denying the findings, Wong and Ehrenkrantz consented to a disciplinary order imposing a $100,000 civil money penalty on Wong and a $25,000 civil money penalty on Ehrenkrantz.