PCAOB Sanctions Two Firms for Violations Related to Required Audit Records and Disclosure of Key Information for Investors

The Public Company Accounting Oversight Board (PCAOB) today announced settled disciplinary orders sanctioning two audit firms: one for violating PCAOB rules and auditing standards related to the timely assembly of a complete and accurate record of the work the firm performed and the other for failing to report key information on the PCAOB’s Form 3 within the required timeframe. 

Proper audit documentation is essential to the audit process and investor protection, given that documentation serves as the written record that provides support for the representations in the auditor’s report. Form 3 reporting also provides key information for investors and others, including the initiation and conclusion of certain criminal, regulatory, administrative, or disciplinary proceedings against a firm or its personnel.

“Failures to document required audit work or to make required disclosures on time undermine trust in the audit and prevent investors and others from accessing important information,” said PCAOB Chair Erica Y. Williams. 

As detailed in the orders released today:

• Goldman & Company, CPA’s, P.C.(PDF) failed to timely assemble a complete and final set of audit documentation in connection with the audit of a broker-dealer, in violation of AS 1215, Audit Documentation. The order imposes on the firm a censure, $25,000 civil money penalty, and undertakings to review and certify its audit documentation policies and procedures and ensure annual training concerning audit documentation requirements.
• Raymond Chabot Grant Thornton LLP(PDF) failed to timely report the initiation and conclusion of three proceedings brought against it by a local regulator, in violation of PCAOB Rule 2203, Special Reports. The order imposes on the firm a censure and $30,000 civil money penalty. The order also requires it to comply with its previously revised policies and procedures concerning PCAOB reporting requirements.

Without admitting or denying the findings, the firms settled with the PCAOB and consented to the PCAOB’s orders and disciplinary actions.

“Registered firms must comply with PCAOB rules and standards related to audit documentation and Form 3 reporting,” said Robert E. Rice, Director of the PCAOB’s Division of Enforcement and Investigations. “These actions show that the PCAOB will hold firms accountable that fail to do so.”

PCAOB enforcement staff members Benjamin Reed and Sam McCoubrey conducted the investigation into Goldman & Company, and PCAOB enforcement staff members Brett Collings and Samantha Parker conducted the investigation into Raymond Chabot Grant Thornton. Both investigations were supervised by C. Ian Anderson and Stephen D’Angelo.

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.

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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.