PCAOB Sanctions Robert C. Duncan Accountancy Corp. and Robert C. Duncan for Violating PCAOB Rules and Standards
Firm registration revoked, Firm owner barred from associating with a registered public accounting firm, and parties fined $30,000
The Public Company Accounting Oversight Board (PCAOB) today announced a settled disciplinary order sanctioning Robert C. Duncan Accountancy Corp. (the “Firm”) and its president and sole shareholder Robert C. Duncan, CPA (“Duncan”) for violations of PCAOB rules and standards in connection with three audits and attestation engagements of a broker-dealer.
The PCAOB found that the Firm repeatedly violated PCAOB rules and standards by failing to obtain an engagement quality review that complied with AS 1220, Engagement Quality Review. Duncan, who served as the engagement partner on the audits, also acted simultaneously as the engagement quality reviewer. PCAOB standards require an objective engagement quality review, by an individual who does not assume any of the responsibilities of the engagement team. As a result, effectively no engagement quality review was performed for the three audits and attestation engagements.
The PCAOB also found that, as the Firm’s principal and sole shareholder, Duncan directly and substantially contributed to the Firm’s violations.
“This Firm and its principal flouted the PCAOB’s engagement quality review requirements,” said PCAOB Chair Erica Y. Williams. “Obtaining objective and compliant engagement quality reviews serves as a meaningful check on the work performed by engagement teams.”
The Firm and Duncan settled with the PCAOB without admitting or denying the findings. They consented to a disciplinary order, which revokes the Firm’s registration with a right to reapply for registration after two years, bars Duncan from associating with any registered public accounting firm with a right to petition to terminate the bar after two years, and imposes a $30,000 civil money penalty jointly and severally on the Firm and Duncan.
“Today’s order demonstrates the importance of firms and their leadership obtaining engagement quality reviews that comply with PCAOB standards,” said Patrick Bryan, Director of the PCAOB’s Division of Enforcement and Investigations. “AS 1220 provides an important safeguard against erroneous or insufficiently supported audit opinions. The Division is committed to bringing enforcement actions against auditors who fail to fulfill their role in protecting investors.”
PCAOB enforcement staff members including Lisa K. Samuels, Johnathon Dobbs, and Dave Eccard conducted the investigation, supervised by Kyra C. Armstrong and Raymond J. Hamm.
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.
PCAOB Office of Communications and Engagement