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PCAOB disciplines PwC, Crowe Horwath affiliate

Tammy Whitehouse | August 8, 2017

The Public Company Accounting Oversight Board has censured PwC and fined the firm $1 million over an audit of Merrill Lynch and its compliance with customer protection rules.

The action follows closely a separate disciplinary measure against the Hong Kong affiliate of Crowe Horwath for refusing to cooperate with an investigation of a China-based issuer audit.

At PwC, the PCAOB says PwC failed to obtain sufficient audit evidence about Merrill Lynch’s assertions regarding its protection of customer securities from liens by creditors. The Securities and Exchange Commission found in 2016 that for several years, Merrill Lynch had tens of billions of dollars of its customers’ fully paid, excess-margin securities in accounts that were exposed to liens by third parties. That’s a violation of...

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