The Member was the engagement partner for the audit of a client. The Member:
- Signed an unqualified audit report on the client’s financial statements that included subsidiaries that had not been audited. The financial statements for the subject year were therefore false and misleading;
- Did not document or perform sufficient work on the valuation of material investments in the subject period; and
- Did not retain sufficient documentation to reasonably evidence the nature and extent of the audit work and testing done, including sufficient evidence of communication with those charged with client governance and internal controls.
The Investigation Committee determined the Member contravened the CPABC Code of Professional Conduct as follows,
201.1 - Maintenance of the good reputation of the profession
202.1 - Objectivity
203 - Professional competence
205 - False or misleading documents and oral representations
206.1 - Compliance with professional standards
The Committee recommended the Member:
- Accept a reprimand;
- Pay partial expenses of $5000; and
- Attend and successfully complete the CPABC course, Quality Management – Overview of CSQM 1 and 2 for Providers of Assurance Services (New Standards).