PCAOB sanctions Baker Tilly US, Mazars US and Grant Thornton India

The Public Company Accounting Oversight Board on Tuesday imposed sanctions and fines on four audit firms, including Baker Tilly US, Mazars USA, as well as Grant Thornton’s Indian affiliate and Australian firm SW Audit.

These companies were sanctioned as part of an overall sweep that allows the PCAOB to collect information about potential violations from multiple companies at the same time. 8 other companies was approved last year This is part of a sweep, which continues as the PCAOB ramps up its enforcement efforts.

The PCAOB said the companies that were sanctioned or fined Tuesday failed to make certain communications with audit committees as required by AS 1301, “Communications with Audit Committees.” The applicable companies are as follows.

Baker Tilly US LLP – $80,000 in civil fines and disciplinary charges

Mothers USA LLP – $60,000 civil money fine and censure

Grant Thornton Bharat LLP (India) – $40,000 civil fine and disciplinary action

SW audit (Australia) – $60,000 civil money fine and censure

Three of the companies also violated other PCAOB rules and standards.

Baker Tilly US, LLP failed to document prior approval of statutory audit services in violation of AS 1215, Audit Documentation.

Grant Thornton Bharat LLP failed to ensure that the issuer client’s audit committee received a copy of the management representation letter, in violation of AS 1301 and AS 2805 ‘Management Representations’.

SW Audit’s failure to obtain prior approval from the audit committee for tax compliance and other services and its involvement with the audit committee resulted in compliance with PCAOB Rule 3520, Auditor Independence, and PCAOB Rule 3524, Certain The company failed to meet the independence requirements in violation of the Tax Services Audit Committee’s prior approval. Audit clients of the issuer under indemnification agreements. SW Audit also failed to maintain effective policies and procedures regarding independence and audit documentation, and violated PCAOB quality control standards.

PCAOB Chair Erica Williams said in a statement that “involved and informed audit committees play a critical role in improving audit quality and protecting investors, and audit committees ensure that audit committees comply with our standards.” “They must be kept informed.” She says, “Sweeps are a valuable tool in the execution toolbox for ensuring outcomes that expose investors to risk.”

“This series of enforcement actions is part of the PCAOB’s ongoing efforts to hold companies accountable for failing to make required communications to issuer audit committees,” Robert E. Rice, Director of Enforcement and Investigations at the PCAOB, said in a statement. It shows our commitment.”

Accounting Today reached out to lawyers and media representatives for both companies. “Baker Tilly is committed to performing high-quality audits,” a Baker Tilly spokesperson said in an email. “We have entered into agreements with the PCAOB to resolve these issues and are working with our clients and engagement teams to avoid potential issues in the future. Continued investment will further improve the quality of our audits.”

The others did not immediately respond to requests for comment.

Each company agreed to its own PCAOB orders and civil penalties without admitting or denying the findings. Each company also agreed to follow revised policies and procedures regarding compliance with PCAOB rules and standards related to these violations.