The Public Company Accounting Oversight Board imposed its highest penalty on an individual ever on a New York CPA, and a similar penalty on the firm where he is a partner.
Both Jonathan B. Taylor and Spielman Koenigsberg Parker LLP were fined $150,000, after Taylor misled PCAOB officials in two inspections and a later investigation.
As part of settlements announced Tuesday, Taylor was also censured and permanently barred from association with a public accounting firm registered with the board. SKP was censured, too, for failing to establish adequate quality control policies and procedures, and had its PCAOB registration revoked; the firm can reapply for registration in five years.
For a 2021 inspection, the board said that Taylor added or modified around 80 workpapers before giving them to PCAOB inspectors, and also that he told inspectors in two different inspections that engagement quality reviews had been performed in certain audits, when they had not.
According to the board, in its subsequent investigation, Taylor repeatedly gave "false and misleading information, including altered work papers, misrepresentations concerning engagement quality reviews, and false certifications concerning whether he had provided all relevant documents in the investigation."
Meanwhile, from 2018 to 2021, the board said that SKP failed to comply with quality control standards. "Among other failures, SKP's system of quality control failed to prevent or detect Taylor's improper alteration of work papers in connection with a PCAOB inspection," the board reported. "SKP also failed to obtain engagement quality reviews of issuer audits for multiple years and to timely or accurately file with the PCAOB required annual reports and audit participant reports. Taylor directly and substantially contributed to those violations."
"The quality control systems at audit firms are fundamental to audit quality and regulatory compliance," said Mark Adler, acting director of the Division of Enforcement and Investigation, in a statement. "Registered firms must take care to establish and implement policies and procedures directed to meaningful monitoring and robust compliance with regulatory requirements."
PCAOB enforcement staff members Michelle Jaconski, George Choundas, and Thomas Barry conducted the investigation, supervised by C. Ian Anderson and Raymond Hamm.
SKP and Taylor did not immediately respond to requests for comment.
