PCAOB Sanctions Yusufali & Associates, LLC and Partner for Multiple Violations of PCAOB Rules and Standards

The Public Company Accounting Oversight Board (PCAOB) today announced a settled disciplinary order sanctioning Yusufali & Associates, LLC (the “firm”) and Yusufali Musaji, CPA (“Musaji”), the sole owner and partner of the firm, for violations of multiple PCAOB rules and standards in connection with four audits of two issuer clients, and for violations of PCAOB quality control standards. The PCAOB also found that Musaji, the engagement partner on the audits, directly and substantially contributed to the firm’s violations.

“To protect investors, the PCAOB will not hesitate to hold accountable auditors who fail to perform audits in accordance with PCAOB rules and standards,” said PCAOB Chair Erica Y. Williams.

The violations committed by the firm and/or Musaji include:

• Failing to obtain engagement quality reviews;
• Failing to obtain sufficient appropriate audit evidence and to perform sufficient audit procedures for multiple significant accounts;
• Failing to determine whether there are critical audit matters;
• Failing to make certain required audit committee communications;
• Failing to comply with audit documentation requirements and failing to cooperate with a Board inspection; and
• Failing to file Form APs.

The PCAOB also found that the firm’s system of quality control failed to provide reasonable assurance that the firm (1) would comply with PCAOB standards – including with respect to requirements regarding audit documentation, engagement quality reviews, and the filing of Form APs – and (2) only undertook engagements that it could reasonably expect to perform with professional competence.

“The violations in this case are numerous and severe and justify the significant sanctions the Board has imposed on the respondents,” said Robert E. Rice, Director of the PCAOB’s Division of Enforcement and Investigations.

Without admitting or denying the findings, Musaji and the firm consented to the PCAOB’s order. The order:

• Censures both respondents and imposes a $50,000 civil money penalty, jointly and severally, against them;
• Revokes the firm’s registration with a right to reapply after three years;
• Bars Musaji with a right to petition the Board to terminate his bar after three years;
• Requires the firm to undertake remedial actions to improve its system of quality control before reapplying for registration; and
• Requires Musaji to complete 50 hours of additional continuing professional education before seeking to terminate his bar.

PCAOB enforcement staff members Benjamin Reed, Tony Chen, and Thomas Barry conducted the investigation, 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.

Contact

PCAOB Office of Communications and Engagement
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