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PCAOB’s Sanctions Four Firms for Violations Involving Audit Committee Communications

S.J. Steinhardt
Published Date:
Feb 21, 2024

The Public Company Accounting Oversight Board (PCAOB) announced settled disciplinary orders that sanction four audit firms for violating PCAOB rules and standards related to communications that firms are required to make to audit committees. The four orders result from an ongoing sweep.

This sweep enables the PCAOB to collect information on potential violations from several firms at the same time, the PCAOB said. The use of such sweeps is part of its strategic goal of strengthening enforcement.

Previous sweeps led to sanctions on five firms in July 2023 and three firms in November 2023.

The four most recent orders imposed sanctions and penalties on the four firms for failure to make certain communications with audit committees, as required by AS 1301, Communications with Audit Committees, according to the PCAOB.

The firms sanctioned were: Baker Tilly US LLP ($80,000 civil money penalty and censure); Grant Thornton Bharat LLP (India) ($40,000 civil money penalty and censure); Mazars USA LLP ($60,000 civil money penalty and censure); and SW Audit (Australia) ($60,000 civil money penalty and censure).

Three of the firms—Baker Tilly US, Grant Thornton Bharat LLP and SW Audit—also violated other PCAOB rules and standards.

“Engaged and informed audit committees play a key role in promoting audit quality and protecting investors, and they must be kept informed in accordance with our standards,” said PCAOB Chair Erica Y. Williams. “Sweeps are a valuable tool in our enforcement toolbox to ensure there are consequences for putting investors at risk.”

“This latest round of enforcement actions demonstrates the PCAOB’s continued commitment to holding firms accountable for failing to make required communications to issuer audit committees,” said Robert E. Rice, director of the PCAOB’s Division of Enforcement and Investigations.

Without admitting or denying the findings, each firm consented to its respective PCAOB order and civil money penalty, the PCAOB said. Each firm also consented to comply with revised policies and procedures concerning adherence to PCAOB rules and standards related to these violations.

"Baker Tilly is committed to executing high-quality audits," a firm spokesperson wrote in an email to Accounting Today. "We entered into an agreement with the PCAOB to resolve these matters and are working with our clients and engagement teams to avoid potential issues in the future. We are confident that these steps, along with the investments we continue to make in our audit processes, will further enhance our audit quality."

Grant Thornton Bharat also sent a response to Accounting Today: “The order relates to a March 2021 audit and we have since ensured the matter highlighted does not recur. Our firm is deeply committed to advancing the public's trust in the quality of audits."

The to other firms did not immediately respond to Accounting Today's requests for comment.

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