backOn January 14, 2025, the PCAOB announced a settled Order sanctioning Baker Tilly US, LLP (“Baker Tilly”) for violations of PCAOB rules and quality control standards.
According to the Board, PCAOB inspectors raised concerns to Baker Tilly in 2018 and 2019 regarding significant engagement deficiencies in various audit areas, including auditing of internal controls over financial reporting, accounting estimates, and execution of engagement quality reviews. The PCAOB found that, despite the firm’s awareness of these concerns, Baker Tilly failed to make effective quality control system changes and failed to remediate the deficiencies through quality control engagement performance and monitoring policies and procedures. Then, in 2021 and 2022, PCAOB inspectors identified similar significant engagement deficiencies across multiple Baker Tilly audits.
Without admitting or denying the findings, Baker Tilly consented to a disciplinary order that (1) censured the firm; (2) imposed a $500,000 civil money penalty; (3) required Baker Tilly to engage an independent consultant to review the firm’s quality control policies and procedures and audit staff training; and (4) required the firm to conduct training for all audit personnel as recommended by the independent consultant.
The PCAOB press release is available here. The settled order can be found here.