The Public Company Accounting Oversight Board’s (PCAOB) latest batch of 2021 audit inspection reports included a setback in results for Marcum largely related to the firm’s work dealing with special purpose acquisition companies (SPACs).
Of five firms inspected annually whose reports were published Monday, Marcum fared the worst, with 15 of its 25 audits reviewed recording deficiencies. The problem identified most frequently—11 times—was the firm’s insufficiency evaluating the appropriateness of an issuer’s accounting method or disclosure for one or more transactions or accounts.
Audit areas with frequent deficiencies included equity and equity-related transactions (nine) and revenue and related accounts (four).
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An ex-partner at Marcum agreed to pay $75,000 to settle charges by the Securities and Exchange Commission he failed to remediate numerous quality control deficiencies magnified by the audit firm’s special purpose acquisition company client boom.
The U.K. arm of audit firm Crowe agreed to pay $750,000 as part of a settlement with the Securities and Exchange Commission for alleged professional care and skepticism failures regarding its 2018 audit of music streaming subscription company Akazoo.
Marcum agreed to pay $13 million in penalties levied by the Securities and Exchange Commission and Public Company Accounting Oversight Board for alleged quality control failures stemming from the audit firm’s work with special purpose acquisition company clients.
Rule amendments proposed by the Public Company Accounting Oversight Board would enable the agency to penalize individual auditors more easily when their conduct is deemed to have contributed to violations by their firms.
Concerned auditors are missing the big picture when assessing a company’s internal control over financial reporting, the chief accountant at the Securities and Exchange Commission called on the profession—and company managers—to take a holistic approach to assessing risks.
The Lovesac Company disclosed it expects to restate certain of its 2023 financial statements after an internal investigation uncovered accounting errors related to its recording of last mile freight expenses.
