PCAOB sanctions firm over quality control

The Public Company Accounting Oversight Board has sanctioned Barzily & Co. CPAs over violations of various board rules and standards, particularly around quality control.

In a settled disciplinary order, the PCAOB censured the Israel-based firm, fined it $50,000, and required it to hire an independent consultant to make recommendations on improving its QC system, and to come back later to make sure the firm has implemented the recommendations.

Barzily & Co.’s QC policies and procedures “failed to provide reasonable assurance that firm personnel would comply with PCAOB standards and regulatory requirements” for its audits from the end of 2017 to 2021, according to the PCAOB.

That led to a number of specific problems, including:

• Failing to timely file five Forms AP;
• Failing to comply with certain requirements regarding audit committee pre-approval of tax services in three audits;
• Failing disclose in one audit report that there were no critical audit matters; and,
• Failing to adequately document certain aspects of two audits.

“This order underscores that an effective system of quality control is fundamental to performing audits in accordance with PCAOB rules and standards,” said Robert Rice, director of the board’s Division of Enforcement and Investigations, in a statement. “Registered firms need to dedicate appropriate resources to develop, monitor, and maintain policies and procedures that provide reasonable assurance that personnel meet all applicable professional standards and regulatory requirements — including new and amended PCAOB rules and standards. In this case, the firm failed to do so.”

Barzily & Co. consented to the disciplinary order without admitting or denying its findings.