PCAOB Sanctions Audit Firm and Partner for Independence, Professional Skepticism Failures and Improper Alteration of Documents
PCAOB imposes $150,000 in total fines, revokes firm’s registration, and permanently bars auditor from association with any registered public accounting firm
The Public Company Accounting Oversight Board (PCAOB) today announced an adjudicated disciplinary order sanctioning AJ Robbins, CPA, LLC (the “Firm”), and Allan Jeffrie Robbins, CPA (“Robbins”) for violations of various PCAOB rules and standards.
Specifically, the PCAOB found the following:
- The Firm issued multiple audit reports and interim review engagements between 2016 and 2018 without first obtaining concurring approval for issuance from an engagement quality reviewer.
- The Firm failed to conduct two issuer audits with due professional care and professional skepticism during 2018.
- The Firm and Robbins failed to cooperate with a PCAOB inspection during 2018 by improperly altering audit documentation and making misrepresentations to the PCAOB’s inspections staff.
- The Firm failed to maintain its independence from an issuer client in violation of SEC and PCAOB rules due to a business relationship with an officer and director of that issuer client.
- Robbins directly and substantially contributed to the Firm’s violations.
“Professional skepticism, independence and cooperation with PCAOB inspections are fundamental to auditors’ responsibilities to protect investors. When auditors fail to uphold those responsibilities, the PCAOB will take action,” said PCAOB Chair Erica Y. Williams.
The order permanently revokes the Firm’s registration, permanently bars Robbins from association with any registered public accounting firm, and imposes a civil monetary penalty of $150,000 on the Firm and Robbins, jointly and severally.
Further description of the misconduct is set forth in the Initial Decision by the PCAOB Hearing Officer, which became the final decision of the Board as to these Respondents on June 21, 2023. No party appealed the Initial Decision, and neither the Board nor the SEC took the matter up for review on its own initiative. With the time for filing any appeal or initiating such review having expired, the sanctions became effective on August 1, 2023.
“In litigation, respondents should expect to face the full consequences of their actions,” said Robert E. Rice, Director of the PCAOB’s Division of Enforcement and Investigations. “As this case demonstrates, for severe misconduct, those consequences can include both sizable civil money penalties and permanent bars and revocations.”
PCAOB enforcement staff member Joshua M. Cutler led both the investigation and the litigation, and was assisted by Kevin J. Matta in the litigation. Kyra C. Armstrong and Raymond J. Hamm supervised the investigation, and Michael Plotnick supervised the litigation.
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.
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, including compliance reports filed pursuant to federal securities laws.
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