News & Insights

Auditor Liability Bulletin

March 29, 2024

PCAOB Sanctions Three Firms for Violations Concerning Audit Documentation

On March 28, 2024, three firms (Berkower LLC, Sassetti LLC, and Freedman & Goldberg C.P.A.’s, P.C.), settled with the PCAOB for violations of PCAOB rules and standards related to audit documentation. The Board identified these violations through a PCAOB sweep.

Specifically, according to the PCAOB, two firms (Berkower and Sassetti) failed to assemble a complete and final set of audit documentation, in violation of AS 1215, Audit Documentation, which requires that such documentation be assembled within 45 days of the audit report release date. The third firm (Freedman & Goldberg) failed to design and implement appropriate policies and procedures based on the audit documentation requirements of AS 1215, as its internal policies and procedures were based on less exacting archiving requirements than the PCAOB’s standard.  

The PCAOB’s order, on a neither admit nor deny basis, censured and imposed a $25,000 civil money penalty on each firm. Each firm also consented to undertake remedial measures to ensure that all professionals involved in any audit received professional education and training concerning AS 1215. Freedman & Goldberg also agreed to establish or improve its policies and procedures regarding audit documentation requirements.

The PCAOB press release is available here, and the settled orders are available here: Berkower LLC, Sassetti LLC, and Freedman & Goldberg C.P.A.'s, P.C.