backOn November 28, 2023, the PCAOB announced settled orders sanctioning three audit firms— Da Hua CPAs, Guney Bagimsiz Denetim Ve Serbest Muhasebeci Mali Musavirlik A.S., and Manning Elliott LLP—for allegedly failing to make (or timely make) required disclosures on the PCAOB’s Form 3. Specifically, the PCAOB alleged that the firms failed to properly disclose reportable events regarding disciplinary proceedings brought against the firms, along with certain restrictions on one firm’s (Da Hua) authorization to engage in the business of auditing or accounting. The PCAOB further noted that Da Hua had been previously sanctioned in 2020 for the same issue, such that this repeated failure to properly report disciplinary proceedings demonstrated an ongoing deficiency in violation of quality control standards.
The PCAOB censured all three firms and imposed civil monetary penalties as follows: a $50,000 penalty to Da Hua CPAs, a $25,000 penalty to Guney Bagimsiz Denetim Ve Serbest Muhasebeci Mali Musavirlik A.S., and a $35,000 penalty to Manning Elliott LLP. Each firm also agreed to undertake measures to review and certify, comply, or improve its PCAOB reporting policies and procedures. Da Hua also agreed to provide a written report to the PCAOB Director of Enforcement and Investigations on its quality control over PCAOB reporting.
The PCAOB’s press release is available here. The settled orders are available here: Da Hua CPAs, Guney Bagimsiz Denetim Ve Serbest Muhasebeci Mali Musavirlik A.S., Manning Elliott LLP.