The Public Company Accounting Oversight Board (PCAOB) just dropped the hammer on five audit firms, issuing fines totaling a hefty $165,000. Now, if you’re thinking, “What’s the big deal?”—grab your coffee because this one’s packed with lessons for every accounting and finance pro out there.
On September 24, 2024, the PCAOB in Washington, DC, announced it had settled sanctions against four audit firms for failing to make required communications with audit committees, and one firm for violating reporting requirements. This wasn’t just a random act—it was part of a larger enforcement sweep, enabling the PCAOB to sniff out potential violations simultaneously across multiple firms. Think of it as the watchdog doing some serious detective work!
Here’s a breakdown of the sanctions and penalties:
Accell Audit & Compliance, P.A.: Hit with a $40,000 fine – failed to meet the requirements under AS 1301, "Communications with Audit Committees", and also violated AS 1305, "Communications About Control Deficiencies in an Audit of Financial Statements," by not communicating material weaknesses in writing.
Crowe MacKay LLP (Canada) and Grant Thornton LLP (Canada): Each faced a $30,000 fine – fell short on AS 1301 compliance and also violated AS 1215, "Audit Documentation," by not documenting audit committee pre-approval of certain services.
Ernst & Young AG (Switzerland): Received a $45,000 fine – missed the mark on AS 1301 communication requirements.
Halpern & Associates, LLC was the lone wolf with a different violation. They failed to report to the PCAOB on Form 3 for over two years, which is a serious breach considering firms are required to disclose certain events within 30 days of occurrence. This landed them a $20,000 penalty.
PCAOB Chair Erica Williams emphasized that “the PCAOB will continue to hold firms accountable for providing audit committees, the PCAOB, and the public with important information to help keep investors protected.”
This isn't the first rodeo for the PCAOB. This enforcement sweep follows previous sanctions on Baker Tilly, Grant Thornton Bharat, Mazars, and SW Audit in February 2024, as well as actions against three firms in November 2023 and five firms in July 2023. Looks like they’re on a roll, huh?
Robert E. Rice, Director of the PCAOB’s Division of Enforcement and Investigations, added that this latest round of orders shows that firms “cannot neglect their responsibilities to keep audit committees informed and report required information.” The PCAOB’s message is clear: they’re not about to let firms slide on these obligations.
For audit professionals, this serves as a wake-up call: the PCAOB means business when it comes to compliance. If you’ve been tempted to cut corners, time to think twice—the watchdog is watching. Know more from here.
Join 250,000+ subscribers
Join Insights for your daily dose of the latest, uninterrupted updates, all delivered in under 5 minutes
Experience MYCPE ONE at its best! Upgrade your browser for a more interactive, user-friendly interface, and stay ahead in your professional development journey.
-1732021500.webp)
