Remember
when auditors were, by their very definition, supposed to be the embodiment of
credibility, trustworthiness and moral fiber? The Brazilian arm of Big Four
auditing giant, Deloitte, forgot these simple prerequisites and as a result the
US auditing watchdog fined the firm a record $8 million for what amounts to
massive fraud: falsifying audit reports, altering documents and providing false
testimony during an investigation that unearthed what it described as its
“most serious” finding of misconduct.
The US Public Company Accounting Oversight Board,
or PCAOB, also penalized or barred 12 former partners, including a national
practice director, and auditors of the Brazil-based Deloitte Touche Tohmatsu
Auditores Independentes.
The Deloitte Brazil case is the first time the
PCAOB has "charged a member of the Big Four auditing firms with fraud and
for failing to co-operate with an investigation" according to the FT.
Worse, unlike banks which resolve similar cases without admitting or denying
guilt, in settling, Deloitte Brazil admitted it had violated quality control
standards and failed to co-operate with the auditing board’s inspection and
subsequent investigation
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