Disciplinary proceedings were brought by the Public Company Accounting Oversight Board (PCAOB) in the United States against the Firm in two instances when the Firm:
- did not conduct an audit of a US-registered public company in accordance with audit standards acceptable to the PCAOB; and
- issued an audit report indicating the audit had been planned and performed in accordance with standards acceptable to the PCAOB, when in fact the audit had been planned and performed in accordance with different Canadian standards.
The PCAOB issued an order censuring the Firm, imposing a US$50,000 penalty and requiring policy and procedure updates by the Firm.
The Investigation Committee determined the Firm contravened the CPABC Code of Professional Conduct as follows:
201.1&.2 - Maintenance of the good reputation of the profession
202.1 - Integrity and due care
203 - Professional competence
205 - False or misleading documents and oral representation
206.1 - Compliance with professional standards
218 - Retention of documentation and working papers
501 - Policies and procedures for compliance with professional standards
502 - Policies and procedures for the conduct of a practice
The Committee noted the significant penalty the Firm had incurred. The Committee recommended the Firm:
- accept a reprimand;
- pay expenses of $2,785; and
- provide evidence to the Director, Professional Conduct, that the Firm’s relevant partners have been trained in generally accepted audit standards of the United States.