The Public Company Accounting Oversight Board (PCAOB) sanctioned and fined three audit firms for failing to report required information to the PCAOB.
PCAOB officials said two of the sanctioned firms failed to timely disclose their role in an audit of an issuer or broker-dealer on the PCAOB’s Form 2, Annual Report. The third firm failed to timely report a legal name change on Form 3, Special Report.
“Firms must not take these obligations lightly. Failures to make required disclosures undercut the PCAOB’s ability to protect investors,” PCAOB Chair Erica Williams said.
The violations were identified by the board’s staff as part of a sweep designed to uncover potential failures to comply with PCAOB reporting requirements.
“Complete and accurate reporting on required annual reports, and timely reporting of firm legal name changes enable investors to rely on information provided by firms and ensures the Board’s ability to oversee registered firms,” Robert Rice, PCAOB director of enforcement and investigations, said. “Sweeps enable us to pursue these types of potential violations and will continue to be an important tool in our enforcement arsenal.”
The three firms that were sanctioned include BDO Taiwan, which received a $35,000 civil money penalty and censure; Jendrach Accounting and Professional Services, which got a $25,000 civil money penalty and censure; and Moore MSLL Lima Lucchesi Auditores e Contadores Ltda., which was hit with a $25,000 civil money penalty and censure.
Without admitting or denying the findings, the firms consented to the PCAOB’s orders and the disciplinary actions.
Additionally, the board required each of the sanctioned firms to improve, or to comply with already-revised, policies and procedures concerning PCAOB reporting requirements.
PCAOB enforcement staff members Melissa Handrigan and Robyn Baggetta conducted the investigation, which was supervised by Kyra Armstrong.
The PCAOB oversees auditors’ compliance with the Sarbanes-Oxley Act, provisions of the securities laws relating to auditing, professional standards, and PCAOB and SEC rules.