PCAOB Sanctions Engagement Quality Reviewer for Inadequate Reviews and False Documentation Created in Advance of Inspection
PCAOB fines Kevin F. Pickard $30,000 and bars him from being associated with a registered firm, in addition to other sanctions
The Public Company Accounting Oversight Board (PCAOB) today announced that it has sanctioned Kevin F. Pickard, CPA (“Pickard”) for violations of PCAOB rules and standards in connection with his engagement quality reviews for audits of Soldino Group Corp’s financial statements for the period ended April 30, 2017, and Vado Corp.’s financial statements for the period ended November 30, 2017.
The PCAOB found that, in both audits, Pickard failed to perform procedures required by AS 1220, Engagement Quality Review. The PCAOB also found that, many months after providing concurring approval of issuance for the audits and in advance of a PCAOB inspection, Pickard violated PCAOB rules and standards when he completed and backdated audit documentation that falsely indicated he had completed all of the procedures required by AS 1220.
“Fully compliant engagement quality reviews and the preparation of truthful and accurate documentation are essential to high-quality audits,” said PCAOB Chair Erica Y. Williams. “True to the PCAOB’s investor-protection mission, the Board takes violations in these areas very seriously.”
Pickard settled with the PCAOB, without admitting or denying the findings, after the Board initiated a disciplinary proceeding against him. He consented to the terms of the disciplinary order, which bars him from being associated with a registered public accounting firm, with the right to file a petition for Board consent to associate with a registered firm after two years; limits his activities in connection with audits of public companies or SEC-registered broker-dealers for one year after termination of the bar; imposes a $30,000 civil money penalty on him; and requires him to obtain an additional 25 hours of continuing professional education relating to PCAOB auditing standards.
“Engagement quality reviews serve as an important safeguard against erroneous or insufficiently supported audit opinions, and an auditor who fails to follow AS 1220 deprives investors of that PCAOB-mandated safeguard,” said Patrick Bryan, Director of the PCAOB’s Division of Enforcement and Investigations. “Similarly, falsifying documentation of engagement quality reviews undermines the PCAOB’s ability to inspect registered firms and report the results to the public.”
PCAOB enforcement staff members Joshua M. Cutler, Mary M. Lewin, and David Eccard conducted the investigation, and were joined by Kevin Matta and Hazel Mak in pre-settlement litigation against Pickard. Kyra C. Armstrong, John Abell, and Michael Plotnick 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.
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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