The Greece-based branch of Big Four audit firm PwC agreed to pay $3 million as part of a settlement with the Public Company Accounting Oversight Board (PCAOB) addressing alleged failures in due professional care and appropriate skepticism regarding an audit of a marine fuel logistics company.
The PCAOB disciplined the firm for its 2016 work at Aegean Marine Petroleum Network, the agency announced in a press release Tuesday. Nicos George Komodromos, the engagement partner for PwC Greece on the audit, was fined $80,000 and barred from being an associated person of a registered public accounting firm for two years.
The details: Aegean’s records indicated it both purchased fuel from and sold fuel to four counterparties located in the United Arab Emirates. The company recorded it sold fuel to the counterparties at a higher price than it paid for its purchases, according to the PCAOB’s order.
During the audit, the PwC Greece engagement team, led by Komodromos, encountered evidence that raised concerns about the transactions and outstanding balances associated with the four counterparties. Despite this and other red flags, the firm moved forward with issuing an audit report containing an opinion on Aegean’s financial statements without obtaining sufficient appropriate audit evidence, the PCAOB said.
The agency further cited the firm for documentation failures regarding PwC Dubai’s attempts to visit the office addresses of the counterparties that Aegean provided. The PwC Dubai team found no evidence the counterparties were at the reported locations and updated PwC Greece, which allegedly disregarded the information.
Compliance considerations: As part of its settlement, PwC Greece agreed to “obtain pre-issuance reviews by a third party for each issuer audit in which the firm prepares or issues an audit report or plays a substantial role in the preparation or issuance of an audit,” the PCAOB said. The firm must also require additional hours of professional training by staff involved in audits.
PwC Greece did not respond to a request for comment. The firm settled with the PCAOB without admitting or denying its findings.