On December 21, 2022, the PCAOB issued a settled order sanctioning the California audit firm Alvarez & Associates and its managing partner for alleged violations of PCAOB audit standards in connection with the firm’s 2018 and 2019 audits of numerous broker dealers.  Specifically, the PCAOB alleged that the firm violated AS 1220 by failing to document the engagement quality reviewer’s concurring approval of issuance for nine 2019 audits.  The PCAOB further alleged that for two such audits, the engagement quality reviewer failed to maintain objectivity by becoming part of the engagement team and directly performing certain audit procedures.  In addition, the firm and managing partner allegedly violated AS 1215 by failing to timely assemble complete and final sets of audit documentation by the documentation completion date for 43 broker-dealer audits in 2018 and 2019 and by failing to document when documentation was changed after the documentation completion date for 25 broker dealer audits.  The firm and managing partner agreed to settle the matter without admitting or denying the allegations.  The PCAOB: censured the firm and managing partner; suspended the firm’s registration and suspended the managing partner from associating with a PCAOB-registered firm for a period of two years; imposed a $50,000 civil monetary penalty on the firm and managing partner jointly and severally; required the firm to undertake certain quality control remedial measures; and required the managing partner to complete 40 additional hours of continuing professional education. The matter is In the Matter of Alvarez & Associates, Inc., Certified Public Accountants, and Vicente Alvarez, CPA.  A copy of the PCAOB order is attached.