PCAOB Revokes Registration of Chinese Firm for Repeatedly Violating PCAOB Rules and Failing To Cooperate with Board Investigation

The Public Company Accounting Oversight Board (PCAOB) today announced a settled disciplinary order sanctioning JTC Fair Song CPA Firm (“the firm”), a public accounting firm located in Shenzhen, the People’s Republic of China, for repeated violations of PCAOB rules and for failing to cooperate with an investigation into those violations.

The PCAOB found that, over a multiyear period, the firm repeatedly failed to make required filings in accordance with PCAOB rules. First, on multiple occasions, the firm failed to timely report the participants in its issuer audits on PCAOB Form AP, in violation of PCAOB Rule 3211, Auditor Reporting of Certain Audit Participants. Second, the firm failed to timely file its annual reports on PCAOB Form 2 for 2021, 2022, and 2023, in violation of PCAOB Rule 2201, Time for Filing of Annual Report.

When the PCAOB’s Division of Enforcement and Investigations attempted to investigate the above-described violations, the firm failed to cooperate with the investigation, refusing to produce documents and information in response to formal demands.

“All registered firms must comply with PCAOB reporting requirements, which are designed to provide the PCAOB, investors, and other stakeholders with important information,” said PCAOB Chair Erica Y. Williams. “When firms don’t comply, the PCAOB will use the tools at our disposal to hold them accountable to fulfill our investor-protector mission.”

Without admitting or denying the findings, the firm settled with the PCAOB and consented to a disciplinary order censuring the firm and revoking the firm’s registration. The Board determined to accept the firm’s offer of settlement, which does not require it to pay a civil money penalty, after considering the firm’s financial resources. Based on the firm’s conduct, the Board would have imposed a civil money penalty of $50,000 on the firm in this settlement if it had not taken the firm’s financial resources into consideration.

“Today’s order should serve as a stark reminder that firms must cooperate with the Board’s investigatory process,” said Robert E. Rice, Director of the PCAOB’s Division of Enforcement and Investigations. “Cooperation with the Board’s processes is a bedrock principle under our rules and standards and is not optional.”

PCAOB enforcement staff members Stefan Hagerup and Tiffany Johnson conducted the investigation. Kyra C. Armstrong and John Abell supervised 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.

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