On September 26, 2023, without admitting or denying the findings, the Colombian affiliate of the Deloitte global network, Deloitte & Touche S.A.S., settled with the PCAOB and consented to a disciplinary order for alleged violations of PCAOB rules and audit standards in connection with the 2016 audit of an issuer.

 

According to the PCAOB, the firm’s system of quality control failed to provide reasonable assurance that its personnel complied with professional standards and regulatory requirements. In particular, the PCAOB alleges the firm continued to perform certain audit procedures and obtain additional evidence after issuance of the audit report and failed to appropriately document the performance of that post-issuance work. Furthermore, the PCAOB alleges that the firm’s monitoring procedures failed to prevent or detect these issues. The PCAOB also alleges that the firm’s system of quality control failed to provide reasonable assurance that its personnel maintained independence in all required circumstances. According to the settled order, the 2016 audit engagement letter incorporated impermissible indemnification language and the firm failed to timely remove two individuals with known financial conflicts from the engagement.

 

The PCAOB imposed a $900,000 civil money penalty and censured the firm. The order also requires the firm to undertake and certify completed improvements to its quality control system.

 

The PCAOB press release is available here, and the settled order is available here.