Canadian public accounting firm Hay & Watson had its registration permanently revoked and must jointly pay a fine of $50,000 along with its owner for violating Public Company Accounting Oversight Board (PCAOB) rules and standards and failing to cooperate with an inspection.
The Vancouver-based firm and its owner/managing partner, Essop Mia, were each censured as part of the PCAOB’s settled disciplinary order published Tuesday. Mia was further barred from being associated with a registered public accounting firm without the possibility of reinstatement.
During a 2019 audit of a public company, Hay & Watson failed to assemble a final set of documentation for the audit, a violation of applicable auditing standards, the PCAOB said. Mia then directed his staff to improperly alter, add to, and backdate work papers “months after the deadline for assembling a complete and final set of audit documentation and shortly before a board inspection. Mia and the firm violated PCAOB rules by providing these altered work papers to the board’s inspectors without disclosing that they had been altered,” the organization said in a press release.
Mia and his firm created or modified at least 68 documents more than 45 days after the completion date of the 2019 audit, according to the PCAOB’s order. Mia and the firm also did not inform PCAOB inspectors about the alterations, which were discovered during an inspection. When confronted, Mia provided a written explanation for some of the alterations but not all of them, the organization said.
“Inspections serve an important role in protecting investors and improving the quality of audit services,” said PCAOB Chair Erica Williams in the press release. “Backdating signoffs and modifying documents in advance of an inspection undermines the PCAOB’s ability to inspect registered firms and warrants significant board sanctions.”
Neither Hay & Watson nor Mia responded to requests for comment.