PCAOB Imposes Fines Totaling $8.5 Million on Netherlands Member Firms of Deloitte, PwC, and EY After Widespread Exam Misconduct

The Public Company Accounting Oversight Board (PCAOB) today announced three settled disciplinary orders sanctioning Deloitte Accountants B.V. (“Deloitte Netherlands”), PricewaterhouseCoopers Accountants N.V. (“PwC Netherlands”), and EY Accountants B.V. (“EY Netherlands”) for violations of PCAOB rules and quality control standards relating to the firms’ internal training programs and monitoring of their systems of quality control.

The PCAOB found that, over a five-year period, all three firms failed to adequately prevent or detect extensive improper answer sharing on mandatory tests for training intended to develop the competencies and professional integrity of their personnel.

The PCAOB and the Dutch Authority for the Financial Markets (AFM) conducted parallel investigations, and the AFM has separately imposed intensive supervision measures aimed at preventing recurrences.

“The PCAOB will not allow impaired ethics to threaten the integrity of our capital markets,” said PCAOB Chair Erica Y. Willliams. “I thank the Dutch Authority for the Financial Markets for its cooperation in the investigations of these matters and applaud the intensive supervision measures it has taken to hold these firms accountable going forward.”

As described in the PCAOB’s orders for these firms, from 2018 to 2022, hundreds of the firms’ professionals, including partners, engaged in improper answer sharing – either by providing access to test questions or answers, or by receiving such access without reporting it – in connection with tests for mandatory firm training courses. This misconduct extended up to the level of senior leaders at Deloitte Netherlands and PwC Netherlands.

The improper answer sharing at the three firms occurred through various methods and in connection with tests for training on a variety of topics, including professional independence, PCAOB audit requirements, and professional integrity.

“As we have stated previously, investors must be able to trust that all audit professionals are acting with integrity, and few things damage trust like impaired ethics,” said Robert E. Rice, Director of the PCAOB’s Division of Enforcement and Investigations. “Our investigations of these three firms revealed that their quality control systems failed to evaluate appropriately and monitor the risk of improper answer sharing among their personnel, including after the firms learned of extensive answer sharing in at least one other major audit firm. We remain committed to our statutory mission of protecting investors and improving audit quality, and we will hold firms accountable when they fail to comply with PCAOB quality control standards.”

Each of the three firms consented to the PCAOB’s respective orders against them, without admitting or denying the findings. Deloitte Netherlands and PwC Netherlands each agreed to pay a $3 million civil money penalty and EY Netherlands agreed to pay a $2.5 million civil money penalty. Each of the firms was censured by the PCAOB and agreed to review and improve their quality control policies and procedures to provide reasonable assurance that their respective personnel act with integrity in connection with internal training, and to report their compliance to the PCAOB.

As noted in today’s orders, all three firms received substantial credit for extraordinary cooperation during the PCAOB’s investigations of the firms, including taking meaningful remedial actions and undergoing the AFM’s intensive supervision process. Absent such cooperation, the civil money penalties against the firms would have been significantly larger, and the Board may have imposed additional sanctions.

PCAOB enforcement staff members David Florenzo, Thomas McCann, Jennifer Byrne, and Dave Eccard conducted the investigations. William Ryan and John Abell supervised the matters.

The PCAOB thanks the Dutch Authority for the Financial Markets for its assistance in this matter.

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.