PCAOB fines Israeli audit firm $200K for violations

The Public Company Accounting Oversight Board posted a settled disciplinary order Tuesday sanctioning an Israeli auditor and her firm for violating the PCAOB’s rules during several audits, imposing a $200,000 penalty.

The sanctions involved Ilanit Halperin and her firm Halperin Ilanit CPA after the PCAOB accused her of violating its rules and standards in connection with the audits of the financial statements of three clients. The PCAOB said her firm violated its standards by failing to obtain engagement quality reviews in connection with those audits, and failed to file timely and accurate forms required. It said the firm also violated its quality control standards; and Halperin directly contributed to the firm’s violations of board rules and engagement quality review and quality control standards.

Halperin is the firm’s owner and sole partner in the Tel Aviv-area firm. Neither Halperin nor her attorney responded to requests for comment.

The audits involved Cuentas, a company in Miami Beach that provides mobile and e-commerce services; Enigma MPC, a San Francisco-based business that focuses on developing blockchain technology; and SuperCom, a Tel Aviv-based company that focuses on providing digital identification, tracking, monitoring and cybersecurity products to governments and other organizations. 

Without admitting or denying the findings, Halperin and her firm agreed to the PCAOB’s order censuring them and imposing a $200,000 penalty, jointly and severally, against them. The board also revoked the firm’s registration — though with a right to reapply after three years — and barred Halperin, with a right to petition for termination of the bar after three years. The order also required her firm to improve its quality control system prior to reapplying for registration, and required her to complete additional continuing professional education before petitioning for reinstatement of her firm.

“Deficient quality control systems put investors at risk,” said PCAOB chair Erica Williams in a statement. “Firms that don’t take quality control seriously should expect to face accountability from the PCAOB.”

The sanctions are only the latest in a growing string of sanctions and penalties imposed by the board amid a crackdown on wayward auditors that began almost two years ago.