The PCAOB is busy sniffing out poor audit behavior to remind everyone to be on their game and don’t get caught doing boneheaded things like faking your audit homework because the PCAOB test is tomorrow. Look, the audits don’t have to be perfect. They just have to be performed correctly.
Now this guy is permanently banned so I guess the upside here is that he’ll never have to worry about another PCAOB inspection. From the PCAOB news release:
The Public Company Accounting Oversight Board (PCAOB) today announced a settled disciplinary order(PDF) sanctioning Hay & Watson and its owner and managing partner, Essop Mia, for violations of PCAOB rules and standards in connection with a 2019 audit and their subsequent failure to cooperate with a PCAOB inspection.
The PCAOB found that Mia, who served as the engagement partner, failed to assemble a final set of audit documentation for the audit, in violation of applicable auditing standards. Instead, Mia, and others acting at his direction, improperly altered, added to, and backdated work papers months after the deadline for assembling a complete and final set of audit documentation and shortly before a Board inspection. Mia and the firm violated PCAOB rules by providing these altered work papers to the Board’s inspectors without disclosing that they had been altered.
The Board censured Hay & Watson and Mia, permanently barred Mia from associating with a PCAOB-registered accounting firm, permanently revoked Hay & Watson’s registration, and imposed a $50,000 civil money penalty jointly and severally on the firm and Mia.
“Faced with an incomplete audit file and an upcoming inspection, Mr. Mia made the wrong choice in directing his staff to alter and backdate documents,” said Patrick Bryan, Director of the PCAOB’s Division of Enforcement and Investigations. “This action sends a strong message that partners and firms must take their obligations to cooperate with Board inspections seriously.”
Kids, if the engagement partner hints at altering audit documents you RUN. Or just send them this.