PCAOB sanctions, bans firm and bars partner

The Public Company Accounting Oversight Board announced today it settled a disciplinary order sanctioning Yusufali & Associates and Yusufali Musaji, the firm's owner and partner for multiple violations of PCAOB rules and standards.

The PCAOB imposed a $50,000 fine, revoked the firm's registration and barred its partner.

The sanction is the latest in a long line of increased enforcement efforts by the PCAOB, most recently including sanctions against four firms in September for failing to make required communications with audit committees, as well as one firm for violating reporting requirements. The Board previously sanctioned Baker Tilly, Grant Thornton Bharat, Mazars and SW Audit in February, as well as three firms in November 2023 and five firms in July 2023.

Courtesy of PCAOB

The violations committed by the Yusufali & Associates and/or Musaji include:

• Failing to obtain engagement quality reviews;
• Failing to obtain sufficient appropriate audit evidence and to perform sufficient audit procedures for multiple significant accounts;
• Failing to determine whether there are critical audit matters;
• Failing to make certain required audit committee communications;
• Failing to comply with audit documentation requirements and failing to cooperate with a Board inspection; and,
• Failing to file Form APs.
  

The Board also found that the firm's quality control system failed to provide reasonable assurance that the firm:

1. Would comply with standards, including requirements regarding audit documentation, engagement quality reviews and Form APs filings, and, 
2. Only undertook engagements that it could reasonably expect to perform with professional competence.
   

"To protect investors, the PCAOB will not hesitate to hold accountable auditors who fail to perform audits in accordance with PCAOB rules and standards," PCAOB Chair Erica Williams said in a statement.

Without admitting or denying the finding, Musaji and the firm consented to the PCAOB's order, which:
 

• Censures both respondents and imposes a $50,000 civil money penalty, jointly and severally, against them; 
• Revokes the firm's registration with the right to reapply after three years; 
• Bars Musaji with a right to petition to terminate his bar after three years; 
• Requires the firm to undertake remedial efforts to improve its system of quality control before reapplying to registration; and, 
• Requires Musaji to complete 50 additional hours of continued professional education before seeking to terminate his bar.