The Public Company Accounting Oversight Board (PCAOB), a nonprofit corporation established by Congress to oversee the audits of public companies, recently settled a disciplinary order that sanctioned Daniel Carpio Diaz, a former partner in the Lima, Peru, office of Tanaka, Valdivia, Arribas & Asociados Sociedad Civil de Responsabilidad Limitada (EY Peru).
Carpio, the person responsible for EY Peru’s full scope component audit for the year that ended Dec. 31, 2020, for Gilat Networks Peru S.A. (GNP), a Latin American subsidiary of an Israel-based provider of satellite-based broadband communications.
According to the order, PCAOB discovered during its audit of GNP that Carpio violated PCAOB audit documentation requirements, failed to appropriately supervise the GNP engagement team, and violated PCAOB rules and standards in evaluating GNP’s revenue recognition, an identified fraud risk.
The order imposes a civil money penalty of $50,000, bars Carpio from being an associated person of a registered public accounting firm, and requires Carpio to complete 40 hours of continuing professional education in addition to any required for any professional license he holds before petitioning PCAOB for consent to associate with a registered public accounting firm. Carpio must wait three years before he can petition for consent to associate with a registered firm.
The PCAOB was created to ensure informative, accurate, and independent audit reports.