The Public Company Accounting Oversight Board has disciplined five auditing firms for violating its rules and standards when communicating with audit committees, part of an overall sweep as the audit overseer ratchets up its enforcement efforts.
The PCAOB has begun using sweeps as part of its overall efforts to bolster enforcement. Three of the sanctioned firms failed to get audit committee pre-approval before offering audit and/or non-audit services to clients. Top 100 Firm BPM LLP, based in San Francisco was hit with a
Plante Moran said it took immediate steps to address the problems once it learned of them from the PCAOB.
"The Public Company Accounting Oversight Board recently announced a settlement related to two separate instances involving Plante Moran dating back to 2018 and 2020 in which we did not obtain audit committee pre-approval for certain services provided to public company audit clients," said the firm in an emailed statement. "It is important to note the PCAOB did not determine that the rule violations impaired the objectivity or impartiality of our engagement team with respect to the audits at issue. Immediately upon learning about the potential violations, Plante Moran cooperated with the PCAOB to ensure we continue to work to the highest standards. We conducted and launched an independent investigation to examine our processes to prevent compliance issues in the future. We take our responsibility to comply with SEC and PCAOB rules and standards very seriously, and we respect the role each organization plays in our capital markets. "
Officials from the other firms did not immediately respond to requests for comment Friday afternoon.
Two other firms were sanctioned for failing to make and/or document their communications with audit committees about the planned participation of other firms and auditors in an audit. They included Mancera SC, based in Mexico City and a member of the EY Global network, which received a
Without admitting or denying the findings, each of the firms agreed to the board's order and disciplinary action and consented to undertake remedial measures to come into compliance with PCAOB rules and standards.
"Audit committees play a critical role in helping protect investors, and the PCAOB will hold firms accountable for their part in making sure audit committees are appropriately informed," chair Erica Williams said in a statement Friday. "Firms must be vigilant in preserving their independence, and part of that means making sure that services performed for issuer audit clients are pre-approved by their audit committees. At the same time, required disclosures are critical to ensure audit committees have the information they need to effectively oversee the auditor's work."
