backOn July 23, 2026, the PCAOB issued a settled disciplinary order sanctioning BDO RCS Auditores Independentes Sociedade Simples Ltda. (“BDO Brazil”) for violations of PCAOB rules and standards in connection the firm’s 2020 audit for an unidentified Brazilian telecommunications company and for quality control violations relating to audit documentation. The firm settled the matter without admitting or denying the PCAOB’s findings.
The PCAOB found that the firm failed to perform planned testing of manual journal entries that presented a heightened risk of fraud during the issuer audit. The PCAOB further found that the firm failed to archive over 40 work papers relating to work assigned to the firm’s information technology group to assist the audit engagement team with testing the issuer’s information technology general controls, in violation of PCAOB audit documentation standards. With respect to quality control, the PCAOB found that from 2020 through 2022, the firm failed to implement adequate policies and procedures to obtain reasonable assurance that its personnel complied with firm policies and PCAOB standards concerning audit documentation. In addition, the PCAOB found that the firm’s internal inspection program failed to identify deficiencies in the firm’s 2019 and 2020 audits of the telecommunications company that were subsequently identified by a BDO Global quality assurance review and a PCAOB inspection.
The PCAOB (1) censured the firm, (2) imposed a civil monetary penalty of $300,000, and (3) required the firm to review and certify its quality control policies and procedures concerning audit documentation and journal entry testing.
The PCAOB settled order is located here.