PCAOB sanctions five firms for violating reporting requirements

The Public Company Accounting Oversight Board announced Tuesday it settled disciplinary orders sanctioning five audit firms for failing to comply with PCAOB reporting requirements, the latest in increased enforcement efforts.

The firms are Bush & Associates CPA, Barton CPA, Crowe Hussain Chaudhury & Co., B S R & Co. (“KPMG India”) and RSM Brasil Auditores Independentes Sociedade Simples. 

“Failures to make required disclosures undercut the PCAOB’s ability to protect investors, and firms must not take these obligations lightly,” PCAOB chair Erica Williams said in a statement.

Three of the firms violated PCAOB Rule 3211, Auditor Reporting of Certain Audit Participants, which requires a firm to file a Form AP within a specified time after an audit report issued by the firms is included in a document filed with the Securities and Exchange Commission. Barton failed to file multiple required Form APs within the specified time, and Bush and Crowe failed entirely to file the Form APs until they were notified of their delinquency by PCAOB staff.

KPMG India and RSM Brazil violated PCAOB Rule 2203, Special Report, which requires a firm to file a Form 3 disclosing certain reportable events — such as criminal, regulatory, administrative or disciplinary proceedings against a firm or its personnel — within 30 days of their occurrence. KPMG India and RSM Brazil both failed to timely report multiple disciplinary proceedings against the firms, and, in the case of KPMG India, its personnel, by local regulators.

KPMG India and RSM Brazil’s violations were identified through regular monitoring of registered firms’ compliance with Form 3 reporting requirements. Bush, Barton and Crowe’s violations were identified through a sweep.

“Sweeps are a critical aspect of the PCAOB enforcement program,” Robert Rice, director of the PCAOB’s Division of Enforcement and Investigations, said in a statement. “We will continue to use sweeps — and ongoing monitoring — to identify firms that fail to comply with PCAOB reporting requirements.”

Tuesday’s sanctions are the latest in a long line of increased enforcement efforts by the PCAOB, most recently including banning the firm Yusufali & Associates and barring its partner for multiple violations. In September, it settled sanctions against four firms for failing to make required communications with audit committees, as well as one firm for violating reporting requirements. The board previously sanctioned Baker Tilly, Grant Thornton Bharat, Mazars and SW Audit in February, as well as three firms in November 2023 and five firms in July 2023.

Without admitting or denying the findings, all the firms consented to their respective orders, which censure the firms and impose $50,000 civil money penalties on Bush and $25,000 each on Barton, Crowe, KPMG India and RSM Brazil. The orders also require each firm to undertake remedial measures to improve their policies and procedures concerning PCAOB reporting compliance.