PCAOB sanctions, bars 2 partners
February 13, 2024
The Public Company Accounting Oversight Board has barred two partners and fined them a total of $165,000.
In a settlement disciplinary order, the two partners, Marcelo de los Santos Anaya and Martin Rodriguez Martinez of San Luis Potosi, Mexico-based Marcelo de los Santos y Cia SC, were cited for failing to follow PCAOB rules and standards in connection with the 2018 and 2019 audits of Mexican steelmaker Grupo Simec SAB de CV.
De los Santos, who was engagement partner on the audits, was barred from associating with a registered firm for five years and fined $125,000.
The board said he "repeatedly" failed to exercise due professional care and obtain sufficient appropriate evidence to support his opinions on Simec's financial statements, noting that he planned and performed the audits by International Standards on Auditing, rather than PCAOB standards. He also failed to adequately evaluate the presentation of the statements or to test the consolidation of its subsidiaries' operations, or to test controls over numerous significant accounts, among other things.
Rodríguez, meanwhile, was barred for two years and fined $40,000. He served as engagement quality review on the audits, but didn't identify or properly address the engagement team's "many significant deficiencies," according to the PCAOB.
Both men consented to the order, without admitting or denying guilt. They will be required to take additional training before they can petition to have their bars removed.
"This order demonstrates that the PCAOB will impose significant sanctions against auditors who fail to perform basic elements of audits," said Chair Erica Williams in a statement. "We will continue to work diligently to identify and address such violations so that we can ensure investors are protected."
"Engagement quality reviews provide an important check on the work of engagement teams," added Robert Rice, director of enforcement and onvestigations. "When those reviews ignore obvious deficiencies in audit work and rubberstamp the issuance of clean audit opinions, they put investors at risk."
The board has been cracking down on auditors over the past year and a half, issuing record fines and penalties.
PCAOB enforcement staff members George Choundas, Brett Collings, Zachary Springfield, and Thomas Barry conducted the investigation, supervised by C. Ian Anderson and Stephen D'Angelo.
[Accounting Today]
