[ad_1]
About a month ago, we fined RSM US $ 950,000 on behalf of the SEC for failing to provide non-audit services to its customers, claiming that a firm like RSM should have been better known. But today, the SEC has been taken to PwC for having also performed non-audit-related work for auditors, which further reinforces how questionable accounting firms are Actually.
P. Dubs agreed to pay the SEC more than $ 7.9 million to settle charges of improper professional conduct and breach of auditor independence rules, which were mainly due to failures of quality controls related to the independence of PwC.
In addition, Brandon Sprankle, a PwC partner, agreed to pay a $ 25,000 fine to settle the charges that he was the leader of the company's independence violations. Under the settlement, Sprankle, who is based in San Jose, California, was suspended from appearing or practicing in the SEC, with the right to reapply for reinstatement after four years.
According to the SEC, PwC and Sprankle solved the problem without admitting or denying the findings and agreed to put an end to future offenses.
Thus, according to the order to cease and abstain from the SEC, all these shenanigans decreased from 2013 to 2016, involving 19 commitments for 15 issuers registered with the SEC. For an audit client, Issuer A, a US-based technology multinational trading in Nasdaq, PwC provided unauthorized non-audit services, including "the exercise of decision-making in the design and implementation of software ". the Company 's financial statements and the management functions of the Company during the 2014 audit period and the professional engagement. "
But hold, it's more:
In addition, in the provision of non-audit services to these 15 SEC registered auditors, PwC breached PCAOB Rule 3525, which requires an auditor to describe in writing to the audit committee the scope of work, discuss it with the audit committee. potential effects of work on independence and document the content of the discussion on independence. PwC failed to comply with the requirements of rule 3525 and, in the course of several engagements, described non-audit as audit services even though it was intended to be computer software implement during a subsequent audit period and provide feedback to management. on these systems – areas outside the field of auditing. PwC's failure to comply with Rule 3525 has prevented the audit committees of many issuers from assessing the potential effects of non-audit services on auditor independence, particularly with respect to the lack of disclosure. independence of the latter. As a result, PwC was hired to provide non – audit services that were improperly defined by the audit committees of many issuers as audit services.
The former chief accountant of the SEC, Lynn Turner, once told me that if a chief financial officer, a comptroller general or, in this case, an audit firm does not bring a significant problem to the attention of the audit committee, "there will not be a huge problem. enough for them to hide. "Audit committees do not like surprises; they expect transparency and open communication at all times. I think members of the audit committee were fed up with what PwC had done.
For example, the issuer A needed a third party to design and implement a CRM software system (governance, risk and compliance), what the auditor independence rules prohibit independent auditors. The transmitter A informed PwC in early April 2014 that he was looking for help for an implementation project.
And it is here that the pleasure began:
At that time, in conjunction with Issuer A's proposals for the implementation of an RCMP software module, the company's internal audit manager, then in charge, asked Sprankle if PwC could provide an implementation proposal and questioned the independence of the auditor. Sprankle replied, "We are absolutely allowed to implement in order to avoid any problem. . . . "However, Mr. Sprankle was aware that PwC's independence policies did not allow it, or the firm, to implement the GRC system at Issuer A.
Not only "we are allowed" but "we are absolutely authorized. "LOL Skip to:
In early May 2014, Sprankle submitted a proposal to Issuer A for assistance with the implementation of the GRC module. The proposal contained many tasks that, taken together, would not be consistent with PwC's independence rules and policies, for example., performs integration testing and works closely with Issuer A's staff to resolve integration issues, works with management to determine security configurations, and provides ongoing hands-on training on how to use the software.
At the beginning of June, Issuer A chose PwC for the GRC project, even though the firm was auditing the financial statements and internal control of Issuer A for the first time. 39, fiscal year 2014. Sprankle has just participated in the audit of the A transmitter by PwC. IT specialist in the audit mission team.
In drafting the engagement letter for approval by PwC's Independent Risk Assurance group, Sprankle described the proposed non-audit services as assessing multiple domains and providing observations and recommendations, as opposed to design and development. the implementation of the GRC project. But in reality, transmitter A expected PwC to design and implement the system.
The final CRM mission statement described the work as a high-level evaluation and recommendation, but of course it was a trick.
From August through mid-October 2014, PwC managed the project, performed major design work, configured the design on a non-production server and oversaw implementation in a real-world environment, according to the SEC .
Throughout the RCMP engagement, the A transmitter has considered PwC as the system developer and sent back to PwC on best practices for the parameters to be included in the system. In addition, according to the IT Internal Audit Manager, Issuer A allowed PwC to "make these decisions for us" and, although a transmitter An employee technically has the keyboard, an employee of PwC manages the process and directs the issuer. An employee on what actions to take.
And according to the SEC, this is how PwC did not describe the non-audit services provided to the audit committee:
When PwC sought prior approval from the Audit Committee, the only written description it provided to the Committee was the title of the project. This written description did not allow the Committee to make an informed decision about the scope of the work and how it might affect PwC's independence, thereby depriving the committee of its oversight responsibilities.
This is only one example. PwC has a tendency to do it several times, as indicated in the order of the SEC.
As part of the settlement with the SEC, PwC agreed to be censored, to pay a restitution of $ 3,830,213, as well as prejudgment interest of $ 613,842 and a fine of $ 3.5 million in civil money. In addition, PwC agreed to a detailed set of commitments requiring the firm to review its existing quality controls to comply with the auditor independence requirements for non-audit and non-audit services. to evaluate its provision of non-audit services.
[ad_2]
Source link