PCAOB Sanctions Former Deloitte Colombia Partner for Issuing Audit Report Before Completing All Necessary Audit Procedures

The Public Company Accounting Oversight Board (PCAOB) today announced a settled disciplinary order sanctioning Gabriel Jaime López Díez (“López”), a former partner of Colombia-based Deloitte & Touche S.A.S. (the “Firm”), for violations of PCAOB rules and auditing standards in connection with the Firm’s 2016 integrated audit of Bancolombia S.A. (“Bancolombia”). The PCAOB found that López failed to perform necessary audit procedures and failed to obtain sufficient appropriate audit evidence before authorizing the issuance of the Firm’s unqualified audit opinions on Bancolombia’s financial statements and internal control over financial reporting.

“If an auditor signs an audit opinion without having done the work necessary to support that opinion, investors are put at risk,” said PCAOB Chair Erica Y. Williams. “The PCAOB will take action to hold auditors accountable when they fail to prepare informative, accurate, and independent audit reports.”

As described in the order, López and the engagement team improperly altered audit documentation, and, in several instances, obtained supporting audit evidence and performed audit procedures after issuance of the audit opinions, in violation of PCAOB standards. These procedures related to revenue, interest expenses, internal controls, and the fair value of Bancolombia’s loan portfolio and its derivatives.

López also violated PCAOB standards by failing to include in the audit documentation, or causing the engagement team not to include, information sufficient to comply with audit documentation standards.

“The PCAOB's broad oversight authority extends to registered non-U.S. firms that audit U.S. issuers and their associated persons,” said Robert E. Rice, Director of the PCAOB’s Division of Enforcement and Investigations. “Today’s order serves as a reminder of the importance of the PCAOB’s global reach and its mission to protect investors."

Without admitting or denying the Board’s findings, López consented to the PCAOB’s order, which censured him and imposed a $75,000 civil money penalty. The order also bars López from being an associated person of a registered public accounting firm, with the option to file for Board consent to associate after two years.

PCAOB enforcement staff members Michael C. Occhuizzo, Ramón L. Torres, Khristoph A. Becker, Jarai R. Ings, and David Eccard conducted the investigation, supervised by Kathleen McGovern, William Ryan, and John Abell.

The PCAOB oversees auditors’ compliance with the Sarbanes-Oxley Act, provisions of the securities laws relating to auditing, professional standards, and PCAOB and SEC rules.

Further information about the PCAOB Division of Enforcement and Investigations is available on the PCAOB website. Firms or individuals wishing to report suspected misconduct by auditors, or to self-report possible misconduct, may visit the PCAOB Tips and Referrals page.

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About the PCAOB

The PCAOB is a nonprofit corporation established by Congress to oversee the audits of public companies in order to protect investors and further the public interest in the preparation of informative, accurate, and independent audit reports. The PCAOB also oversees the audits of brokers and dealers registered with the Securities and Exchange Commission, including compliance reports filed pursuant to federal securities laws.

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