The Public Company Accounting Oversight Board (PCAOB) announced disciplinary sanctions against sanctioning Deloitte Accountants B.V.(PDF) (“Deloitte Netherlands”), PricewaterhouseCoopers Accountants N.V.(PDF) (“PwC Netherlands”), and EY Accountants B.V.(PDF) (“EY Netherlands”) in the Netherlands for violating PCAOB rules.
The $8.5 million in fines comes after an investigation into the firms found that all three firms had failed to adequately prevent or detect improper answer sharing on mandatory testing for training intended to develop competencies in personnel. Officials with PCAOB said answer sharing violated PCAOB rules and quality control standards. The investigations were conducted by PCAOB and the Dutch Authority for the Financial Markets (AFM). The AFM also separately imposed intensive supervision measures designed to thwart future such events.
“The PCAOB will not allow impaired ethics to threaten the integrity of our capital markets,” PCAOB Chair Erica Y. Willliams said. “I thank the Dutch Authority for the Financial Markets for its cooperation in the investigations of these matters and applaud the intensive supervision measures it has taken to hold these firms accountable going forward.”
The agencies said from 2018 to 2022, hundreds of the firms’ professionals, including partners, engaged in answer sharing – either by providing access to test questions or to answers, in connection with tests for mandatory training courses. The misconduct extended up to senior leaders of Deloitte Netherland and PwC Netherlands.
“As we have stated previously, investors must be able to trust that all audit professionals are acting with integrity, and few things damage trust like impaired ethics,” Robert E. Rice, Director of the PCAOB’s Division of Enforcement and Investigations. “We remain committed to our statutory mission of protecting investors and improving audit quality, and we will hold firms accountable when they fail to comply with PCAOB quality control standards.”
The three firms consented to the orders against them without admitting or denying the findings. Deloitte Netherlands and PwC Netherlands each agreed to pay a $3 million civil money penalty and EY Netherlands agreed to pay a $2.5 million civil money penalty. Each of the firms was censured by the PCAOB and agreed to review and improve their quality control policies and procedures≥