The Public Company Accounting Oversight Board (PCAOB) penalized four audit firms for failing to disclose who led specific audits for their firms and whether any other firms were involved in those audits.
The lapses were discovered by the PCAOB during a sweep, where the regulator collected information regarding potential violations from multiple firms at the same time. The PCAOB found the four firms failed to file Form AP within 35 days after the date an audit report is first included in a document filed with the Securities and Exchange Commission.
All four firms have since filed their Form APs, but only after the PCAOB took action, the regulator said Tuesday in a press release.
Without admitting or denying the organization’s findings, Israel-based Yarel + Partners agreed to pay $35,000 and be censured for failing to file six Form APs over three years.
Three other firms—Shanghai Perfect CPA Partnership, New York-based James Pai CPA, and New York-based Liebman Goldberg & Hymowitz—were each fined $20,000 and censured. According to their respective orders, Shanghai Perfect, James Pai, and Liebman Goldberg & Hymowitz each failed to file three Form APs over two years.
“Investors and the public rely on Form AP disclosures to understand exactly who has a hand in the audits of public companies,” said PCAOB Chair Erica Williams in the press release. “Timely disclosure is critical for transparency and accountability in our capital markets, and the PCAOB will be vigilant in enforcing disclosure rules.”
In addition to the penalties and censures, the firms, within 90 days, agreed to establish policies and procedures that provide reasonable assurance of compliance with PCAOB reporting requirements, as well as policies for training firm personnel about those requirements.
Within 120 days, each firm must file a certification with the PCAOB that identifies the remediations made by the firm, provides “written evidence of compliance in the form of a narrative,” and is “supported by exhibits sufficient to demonstrate compliance.”