Following Sweeps, PCAOB Sanctions Five Firms for Violations Related to Audit Documentation and Disclosure of Who Worked on Audits

The PCAOB imposes censures, $130,000 in total fines, and remedial undertakings that include training and improvement of policies and procedures to foster compliance with PCAOB rules or standards

Washington, DC, Mar. 28, 2024

The Public Company Accounting Oversight Board (PCAOB) today announced settled disciplinary orders sanctioning five audit firms for violating PCAOB rules and standards related to audit documentation and the timely filing of Form APs. Audit documentation maintains the integrity of the audit process because it is the written record that provides support for the representations in the auditor’s report. Form APs disclose who led specific audits for the firm and whether any other firms were involved in those audits. 

The firms were sanctioned as part of sweeps, which enable the PCAOB to collect information on potential violations from several firms at the same time. Starting in 2022, the PCAOB expanded its use of sweeps as part of its strategic goal of strengthening enforcement. 

“These requirements are designed to protect investors, and when firms fail to meet them, the PCAOB won’t hesitate to take action,” said PCAOB Chair Erica Y. Williams.  

Specifically, two firms failed to timely assemble a complete and final set of audit documentation within 45 days of the audit report release date, in violation of AS 1215, Audit Documentation. The firms are the following: 

One firm failed to design and implement appropriate policies and procedures to provide it with reasonable assurance that it would comply with AS 1215’s requirements: 

Two firms failed to timely file Form APs in violation of PCAOB Rule 3211, Auditor Reporting of Certain Audit Participants. The firms are the following: 

Without admitting or denying the findings, each firm consented to its respective PCAOB order and disciplinary actions. Each firm also consented to undertake remedial measures. Berkower, Sassetti, and Freedman & Goldberg agreed to undertake professional education and training concerning compliance with AS 1215. Furthermore, Freedman & Goldberg, Bolko, and Fontanella consented to improve their policies and procedures concerning compliance with PCAOB rules and standards related to these violations.  

“These orders demonstrate the importance of compliance with PCAOB rules and standards related to audit documentation and the timely filing of Form APs,” said Robert E. Rice, Director of the PCAOB’s Division of Enforcement and Investigations. “The PCAOB will take action to hold firms accountable when they violate them.” 

PCAOB enforcement staff members Brett Collings, Sina Mansouri, Benjamin Reed, Jennifer Gibbons, and Thomas Barry conducted the investigations, supervised by Kyra Armstrong and C. Ian Anderson. 

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. 

Contact 

PCAOB Office of Communications and Engagement 
[email protected]