PCAOB Sanctions Former Audit Partner for Multiple Violations of PCAOB Rules and Standards

The Public Company Accounting Oversight Board (PCAOB) today announced a settled disciplinary order sanctioning Daniel Carpio Diaz (“Carpio”), a former partner in the Lima, Peru, office of Tanaka, Valdivia, Arribas & Asociados Sociedad Civil de Responsabilidad Limitada (“EY Peru”).

This case involves multiple violations of PCAOB rules and standards by Carpio, the partner responsible for EY Peru’s full scope component audit (for the year ended December 31, 2020) of Gilat Networks Peru S.A. (“GNP”), a Latin American subsidiary of an Israel-based provider of satellite-based broadband communications.

Violations Found By the PCAOB

As described in further detail in the order, the Board found that during the GNP audit work, Carpio:

• Violated PCAOB rules and standards in evaluating GNP’s revenue recognition, an identified fraud risk;
• Failed to appropriately supervise the GNP engagement team; and
• Violated PCAOB audit documentation requirements.

Sanctions Imposed by the PCAOB

The order:

• Censures Carpio;
• Bars Carpio from being an associated person of a registered public accounting firm, with the right to petition the Board for consent to associate with a registered firm after three years;
• Imposes a civil money penalty in the amount of $50,000 on Carpio; and
• Requires Carpio to complete 40 hours of continuing professional education (CPE), in addition to any CPE required in connection with any professional license he holds, before filing any petition for Board consent to associate with a registered public accounting firm.

Learn More

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.