Disciplinary proceedings were brought by the Public Company Accounting Oversight Board (PCAOB) in the United States against the Firm when the Firm did not comply with various PCAOB rules. The PCAOB found that in performing two audits, the Firm had relied in a substantial manner on audit firms which were not registered with PCAOB.
PCAOB issued an order in which the Firm agreed to:
- A censure;
- Paying a fine of US$175,000; and
- Improve procedures which would prevent a recurrence of the incident.
The Firm failed to self-report the PCAOB’s Order to CPABC as the Code requires.
The Investigation Committee determined that the Firm contravened the following Rules of the CPABC Code of Professional Conduct:
102.3 - Matters to be reported to CPABC
201.1 - Maintenance of the good reputation of the profession
202.1 - Integrity and due care
206.1 - Compliance with professional standards
The Committee recommended that the Firm:
- accept a reprimand; and
- pay investigation expenses of $1,592.