The Public Company Accounting Oversight Board censured PricewaterhouseCoopers’ Canadian firm and imposed a $750,000 penalty, saying over 1,200 employees shared answers to tests during mandatory training courses on auditing, accounting and professional independence.
The PCAOB also required PwC Canada to set up monitoring procedures to ensure its personnel undergo the internal training and that it tests “with integrity,” and that they have the technical proficiency required, according to Thursday’s
The order found that from at least 2016 until early 2020, PwC Canada violated PCAOB rules and quality control standards by failing to establish policies and procedures for administering and overseeing internal training tests, including tests to help the firm’s audit professionals satisfy requirements for maintaining their accounting certifications.
“Those quality control failures prevented the firm from identifying that more than 1,200 firm professionals were involved in improper answer sharing — either by providing or receiving answers — in connection with tests for mandatory internal training courses covering topics that included auditing, accounting and professional independence,” said the PCAOB. “More than 1,100 of these professionals were from the firm’s assurance practice.”
PwC Canada said it has been taking steps to correct the problem since it became aware of the test answer sharing. “In early 2020, it came to our attention that some of our people, primarily junior-level assurance employees, shared online documents containing answers to some internal assessments as part of this additional training,” said PwC Canada CEO Nicolas Marcoux in a
As part of the firm’s personnel management system, PwC Canada administers an internal training program for all its professionals. The training requirements vary according to each professional’s position, role and industry practice area. The internal training often includes a testing component.
Going back to at least 2016, the PwC Canada used an online platform that allowed it to deliver, track and record completion of the mandatory training and testing. The platform records the dates and times when employees access and complete the mandatory training and testing. The firm doesn’t credit employees with completing the training until they satisfactorily pass the related test. PwC Canada required all its employees to take certain online courses, including courses on maintaining professional independence and performing professional responsibilities with integrity. The courses include a testing component at the end. The firm also administered several online courses related to auditing and accounting that varied based on experience level. Many of the audit-related courses include a testing component and are mandatory for audit personnel.
However, from at least 2016 to early 2020, the PCAOB found that more than 1,200 PwC Canada employees were involved in improper answer sharing related to training tests. They mainly shared answers by using several shared drives that professionals had created on the firm’s computer network on which they posted the answers for others to view and provide supplemental answers. In addition, they shared answers by sending emails with attached documents containing answers to training test questions, by providing answers in hard copy documents, or by discussing answers when taking tests in the presence of others.
The instances of improper answer sharing mainly occurred in connection with tests that were part of the firm’s mandatory assurance training. The shared drives contained answers to at least 46 of the approximately 55 mandatory assurance tests, as well as answers to some mandatory firm-wide tests containing content concerning professional integrity and professional independence. The improper sharing of training test answers happened among junior staff, managers, directors and partners at the firm. After PwC Canada leadership learned of the practice, the firm did an internal investigation and found the misconduct was widespread within the audit practice, including among those who performed work on audits governed by PCAOB standards. At least 1,100 professionals in the assurance practice were involved in sharing answers.
In addition to the $750,000 penalty levied by the PCAOB, Marcoux said the firm agreed to a $200,000 penalty and sanctions from Canada’s audit regulator, the Canadian Public Accountability Board, but both board's acknowledged that the firm worked closely with them.
"Both CPAB and PCAOB credit PwC Canada for extraordinary cooperation,” Marcoux said in the firm’s media statement. “While we are confident there has been no impact or compromise to the quality of our audits as evidenced by our current inspection results, we expect more from everybody in our firm.”
In 2019, another Big Four firm, KPMG, agreed to
