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The Daily

China-based Firm Barred from U.S. Audits after PCAOB Settlement

Chris Gaetano
Published Date:
Jan 13, 2016
GavelA Chinese audit firm settled with the PCAOB over charges that it violated provisions of the Sarbanes-Oxley Act, and so has been barred from acting as a CPA firm for U.S. issuers. Specifically, the PCAOB sanctioned the firm PKF HK for failing to cooperate with a board investigation. While the firm said that they had a legal obligation not to provide the information the PCAOB was seeking, the PCAOB in turn said this does not cancel out its own obligation to cooperate with investigations. Consequently, the firm was censured and its registration was revoked, with the right to reapply after three years. In addition, three individuals within the firm were each censured and barred from being an associated person for a period of no less than three years. 

"The Board's enforcement authority is a fundamental tool for investor protection. The refusals of PKF HK and three of its associated persons to cooperate prevented the Board from determining whether PKF HK and its personnel fulfilled their obligations under PCAOB audit standards in an audit relied upon by U.S. investors," said Claudius B. Modesti, PCAOB Director of Enforcement and Investigations.