PCAOB Sanctions Firm and Audit Partner for Noncooperation With a Board Inspection
PCAOB permanently revokes registration of Hay & Watson, permanently bars owner Essop Mia, and fines them $50,000
The Public Company Accounting Oversight Board (PCAOB) today announced a settled disciplinary order sanctioning Hay & Watson and its owner and managing partner, Essop Mia, for violations of PCAOB rules and standards in connection with a 2019 audit and their subsequent failure to cooperate with a PCAOB inspection.
The PCAOB found that Mia, who served as the engagement partner, failed to assemble a final set of audit documentation for the audit, in violation of applicable auditing standards. Instead, Mia, and others acting at his direction, improperly altered, added to, and backdated work papers months after the deadline for assembling a complete and final set of audit documentation and shortly before a Board inspection. Mia and the firm violated PCAOB rules by providing these altered work papers to the Board’s inspectors without disclosing that they had been altered.
“Inspections serve an important role in protecting investors and improving the quality of audit services,” said PCAOB Chair Erica Y. Williams. “Backdating signoffs and modifying documents in advance of an inspection undermines the PCAOB’s ability to inspect registered firms and warrants significant Board sanctions.”
The Board censured Hay & Watson and Mia, permanently barred Mia from associating with a PCAOB-registered accounting firm, permanently revoked Hay & Watson’s registration, and imposed a $50,000 civil money penalty jointly and severally on the firm and Mia.
“Faced with an incomplete audit file and an upcoming inspection, Mr. Mia made the wrong choice in directing his staff to alter and backdate documents,” said Patrick Bryan, Director of the PCAOB’s Division of Enforcement and Investigations. “This action sends a strong message that partners and firms must take their obligations to cooperate with Board inspections seriously.”
PCAOB enforcement staff members Michelle Jaconski, Michael C. Occhuizzo, and David Eccard conducted the investigation, supervised by Raymond J. Hamm 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.
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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