
The Public Company Accounting Oversight Board (PCAOB) sanctioned four audit firms for violating the agency's rules and standards on communications to audit committees. The sanctions were part of an enforcement sweep, which allows the agency to collect information on possible violations from several firms simultaneously.
“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,” said PCAOB Chair Erica Williams.
The PCAOB imposed censures, $165,000 worth of fines, and remedial undertakings, including training and improving policies and procedures.
Two of these firms—Crowe MacKay and Grant Thornton—also failed to document audit committee pre-approval of certain services, in violation of AS 1215, Audit Documentation.
The same PCAOB sweep that led to these four orders on audit committee communications also resulted in previous sanctions on four firms in Feb. 2024, three firms in Nov. 2023, and five firms in July 2023.
The PCAOB also sanctioned Halpern & Associates because it failed for over two years to report to the Board on Form 3 the initiation of a disciplinary proceeding that the Securities and Exchange Commission brought against the firm and its namesake partner, violating PCAOB Rule 2203, Special Reports.
The PCAOB identified Halpern & Associates’ violation from regularly monitoring registered firms’ compliance with the requirement to timely report the events listed in Form 3.
PCAOB Rule 2203, Special Reports mandates registered firms to file a Form 3 disclosing certain reportable events listed in that form within 30 days of the events' occurrence.
After each firm consented to orders and civil money penalties without admitting or denying the findings, they promised to undertake remedial measures to comply with PCAOB rules and standards on these violations.
“This latest round of orders shows that firms cannot neglect their responsibilities to keep audit committees informed and report required information to the PCAOB,” said Robert Rice, director of the PCAOB’s Division of Enforcement and Investigations. “The PCAOB will bring disciplinary actions to reinforce the importance of these obligations, as set forth in our rules and standards.”