The Public Company Accounting Oversight Board levied sanctions Tuesday against firms in the U.S., Canada and the United Arab Emirates for violating various rules and standards.
In the U.S., it sanctioned KKM CPA Associates PLLC, a firm in Garden City, New York, for failing to file annual reports on Form 2 that disclose, among other things, each issuer for which a firm issued any audit reports during a reporting period. Even though it had audited an issuer during the 2022 annual reporting period, KKM failed to list that engagement on its Form 2 for that period and instead indicated that it hadn’t audited any issuers, according to the PCAOB. KKM’s violation was identified as part of a sweep that the PCAOB routinely uses to collect information on potential violations from several firms at once. Without admitting or denying the findings, KKM consented to an order censuring the firm and imposing a $25,000 penalty, while also requiring it to undertake remedial measures to improve its policies and procedures concerning compliance with PCAOB reporting.
In Canada, the PCAOB announced a settled disciplinary order sanctioning De Visser Gray LLP, based in Vancouver, British Columbia, for violating PCAOB rules and quality control standards because its system of quality control failed to provide reasonable assurance that the firm and its auditors would comply with PCAOB professional standards and regulatory requirements; perform sufficient procedures to determine critical audit matters; comply with independence-related pre-approval requirements before providing tax services to an audit client; make all required audit committee communications; and file Forms AP on a timely basis. Without admitting or denying the PCAOB’s findings, De Visser Gray settled with the PCAOB and consented to a disciplinary order that imposes a $60,000 penalty; requires the firm to establish and/or revise its quality control policies and procedures to provide reasonable assurance that the work performed by engagement personnel meets all applicable audit requirements; and requires the firm to train its personnel on certain PCAOB rules and standards.
In the UAE, the PCAOB sanctioned BDO Chartered Accountants & Advisors for violating PCAOB Rule 2203, Special Reports, which requires registered firms to file a Form 3 disclosing certain reportable events within 30 days. BDO UAE and a former partner at the firm were respondents in a disciplinary proceeding brought by the Auditors Disciplinary Board of the United Arab Emirates Ministry of Economy. However, BDO UAE failed to report the initiation and conclusion of the proceeding until about nine months after it ended.
Without admitting or denying the findings, BDO UAE consented to an order censuring the firm, imposing a $20,000 penalty, and requiring remedial measures to improve its policies and procedures concerning compliance with PCAOB reporting.
“No matter where they are located, PCAOB-registered firms must follow PCAOB rules and standards,” said PCAOB chair Erica Williams in a statement. “Failing to do so puts the investing public at risk and will not be tolerated.”
The firms and attorneys did not immediately respond to requests for comment.
