Public Company Accounting Oversight Board (PCAOB) officials have detailed seven settled disciplinary orders sanctioning the tax and advisory firm KPMG and individuals for a series of alleged violations.
The $7.7 million in penalties addressed alleged violations of professional auditing standards, quality control standards, and PCAOB rules.
“These actions should send the message to KPMG and all other registered firms that the PCAOB is committed to rooting out misconduct wherever it occurs and will employ all sanctions at its disposal to protect investors and improve audit quality,” PCAOB Chair Erica Y. Williams said.
The Board alleged KPMG Colombia violated PCAOB rules and standards in connection with the agency’s 2016 inspection of the firm. PCAOB also charged the firm with violating quality control standards relating to audit documentation and the firm’s internal training program.
The PCAOB sanctioned KPMG UK for allegedly violating PCAOB quality control standards related to integrity and personnel management.
The PCAOB also sanctioned KPMG UK for allegedly failing to reasonably supervise an unregistered audit firm in four consecutive audits of a public company client.
The Board determined KPMG UK was found to have violated, in connection with the same four audits, PCAOB standards regarding due professional care, audit planning, audit committee communications, and quality control – adding the firm made several inaccurate filings on PCAOB Form AP regarding other audit clients.
Additionally, the PCAOB sanctioned KPMG India and KPMG India engagement partner Sagar Pravin Lakhani based on KPMG India’s quality control failures and Lakhani’s supervisory and documentation failures in connection with a practice of signing off on blank placeholder work papers during the 2017 audit of a public company.