PCAOB Sanctions Six Firms for Failing to Make Required Disclosures

The Public Company Accounting Oversight Board (PCAOB) today announced settled disciplinary orders sanctioning six audit firms for failing to report – or to report within the required timeframe – key information to the PCAOB. Specifically, the firms did not make required disclosures on the PCAOB’s Form 3, which covers items such as a firm or its personnel being the subject of certain criminal or disciplinary proceedings.

For five of the six firms, Board staff identified the Form 3 violations as a result of a sweep designed to uncover potential failures to comply with PCAOB reporting requirements. As part of its effort to strengthen enforcement, the Board has increased the use of sweeps against firms where there may be a violation of PCAOB standards or rules.

“Timely special reporting on Form 3 provides information that is important to investors and to the Board’s oversight of registered firms,” said Mark A. Adler, PCAOB Acting Director of Enforcement and Investigations.

The firms, without admitting or denying the findings, consented to the PCAOB’s orders and the disciplinary actions. The firms are the following:

• Grant Thornton LLP – $40,000 civil money penalty and censure
• KPMG Samjong Accounting Corp. – $30,000 civil money penalty and censure
• BDO RCS Auditores Independentes – $30,000 civil money penalty and censure
• MaloneBailey, LLP – $25,000 civil money penalty and censure
• Grant Thornton Auditores Independentes Ltda. – $20,000 civil money penalty and censure
• KCCW Accountancy Corp. – $20,000 civil money penalty and censure

The Board also required each of the sanctioned firms to improve, or to comply with already-revised, policies and procedures concerning PCAOB reporting requirements.

PCAOB enforcement staff member Brett Collings conducted the investigation, supervised by Kyra Armstrong, John Abell, and Bill Ryan.

The PCAOB oversees auditors’ compliance with the Sarbanes-Oxley Act, provisions of the securities laws relating to auditing, professional standards, and PCAOB and SEC rules. Further information about the PCAOB Division of Enforcement and Investigations is available on the PCAOB website. Firms or individuals wishing to report suspected misconduct by auditors, or to self-report possible misconduct, may visit the PCAOB Tips and Referrals page.

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About the PCAOB

The PCAOB is a nonprofit corporation established by Congress to oversee the audits of public companies in order to protect investors and further the public interest in the preparation of informative, accurate, and independent audit reports. The PCAOB also oversees the audits of brokers and dealers, including compliance reports filed pursuant to federal securities laws.

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