The Public Company Accounting Oversight Board yesterday settled a disciplinary order sanctioning SS Accounting and Auditing and its owner and partner, Saima Sayani, for violating its rules and standards.
The PCAOB imposed a $65,00 fine, revoked the firm's registration and barred Sayani for deficient work related to two audits of an issuer, China Green Agriculture, and for violating quality control standards. The Board found that Sayani directly and substantially contributed to the firm's quality control violations.
"The misconduct in this matter presented significant risks to investors, including failing over two years to obtain sufficient appropriate audit evidence supporting the audit opinion on a public company's financial statements," PCAOB chair Erica Williams said in a statement. "When auditors put investors at risk, the PCAOB will take enforcement actions to hold those auditors accountable."
The violations committed include:
- Failing to obtain sufficient appropriate audit evidence and to perform sufficient audit procedures for multiple significant accounts, including revenue and inventory;
- Failing to perform sufficient audit procedures to test journal entries in response to the risk of fraud;
- Failing to make certain required audit committee communications;
- Failing to determine critical audit matters; and,
- Failing to identify significant findings and issues in an engagement completion document.
The PCAOB also found that the firm's quality control system did not provide reasonable assurance that the work performed by engagement personnel would meet professional standards and regulatory requirements, and the firm failed to monitor its quality control system.
"The firm and its partner violated PCAOB standards in the conduct of the audits and failed to implement quality control policies and procedures to safeguard against these violations," Robert Rice, director of the PCAOB's Division of Enforcement and Investigations, said in a statement. "The sanctions imposed by the Board on the respondents reflect the seriousness of those failures."
Without admitting or denying the findings, Sayani and the firm consented to the PCAOB's order, which:
- Censures both respondents and imposes a $65,000 civil money penalty, jointly and severally, upon them;
- Revokes the firm's registration with a right to reapply after two years;
- Bars Sayani from associating with a registered public accounting firm, with a right to petition the Board to terminate her bar after two years;
- Requires the firm to undertake remedial actions to improve its system of quality control before reapplying for registration; and,
- Requires Sayani to complete 50 hours of additional continuing professional education and training before seeking to terminate her bar.
The sanction is the latest in a long line of increased enforcement efforts by the PCAOB, most recently including
