Former Senior Partners of Deloitte Turkey Sanctioned for Misconduct In Connection with a PCAOB Inspection and Investigation

The Public Company Accounting Oversight Board today announced that it has barred two former senior partners of Turkey-based DRT Bagimsiz Denetim ve Serbest Muhasebeci Mali Musavirlik A.Ş. (Deloitte Turkey) from associating with a PCAOB-registered accounting firm.

The PCAOB found that the partners, Hüseyin Gürer and Gökhan Alpman, who both served as chief executive officers of Deloitte Turkey, were aware of an effort at the firm to improperly alter documents in advance of a 2014 PCAOB inspection and they did not try to stop it. The document alterations ultimately led to charges against Deloitte Turkey and two other of its former personnel.

The Board today also barred a third senior partner, Ömer Tanriöver, the former risk and reputation leader, for failing to cooperate with a PCAOB investigation of the matter.

"Audit firms and their personnel have a fundamental duty to act with integrity. That integrity begins with their senior leaders and the tone they set for the audit practices they oversee," said William D. Duhnke, PCAOB Chairman.

"When firm leadership fails in its responsibilities, the Board will take appropriate action to hold that leadership accountable," he added.

In addition to the bar, Gürer was fined $25,000. Gürer and Alpman may apply to have their bars lifted after three and two years, respectively. Tanriöver's bar is permanent. Tanriöver refused to provide information in response to demands from PCAOB investigators.

"The orders announced today make clear that, far from setting an appropriate tone at the top, Deloitte Turkey's former CEOs directly and substantially contributed to the firm's ethical lapses and are facing the serious consequences of that behavior," said Claudius B. Modesti, Director of PCAOB Enforcement and Investigations.

"In addition, the imposition of the severest of sanctions on the firm's former risk and reputation leader demonstrates the importance of cooperating with PCAOB investigations," he added.

The PCAOB orders also censured Gürer, Alpman, and Tanriöver, who neither admitted nor denied the findings in their respective orders.

In December 2017, the Board issued orders finding that the firm and two other former partners improperly altered documents intended for review by PCAOB inspectors. In those orders, the Board credited the firm and those former partners with providing extraordinary cooperation in the investigation, which resulted in reduced sanctions.

The PCAOB investigation was conducted by Alan Lo Re, with the assistance of Tiffany Johnson. The investigative team was supervised by William Ryan and Marion Koenigs.

The PCAOB oversees auditors' compliance with the Sarbanes-Oxley Act, professional standards, and PCAOB and Securities and Exchange Commission 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 use the PCAOB Tip & Referral Center.