PCAOB sanctions Crowe Horwath’s Hong Kong Firm
The Public Company Accounting Oversight Board (PCAOB) recently announced that registration of the Crowe Horwath’s Hong Kong firm has been revoked in a settled disciplinary order after the firm refused to cooperate with the board in relation to its investigation of the audits performed by the Hong Kong firm of a China-based issuer.
Crowe Horwath (HK) CPA Ltd has acquiesced to the sanctions imposed on it by the PCAOB and also admitted to the findings and violations brought in to light by the disciplinary order. The registration of the firm was invalidated with the legal right to reapply for registration after the span of three years, and the firm was also censured.
The PCAOB chairman, James Doty, has said that ‘The Sarbanes-Oxley Act’ allows the PCAOB to impose sanctions of significant nature on any registered firm that refuses to cooperate or produce information requested by the PCOAB in relation to its investigations.
He further said that it is an important tool that we use in order to protect our investors and we will not hesitate to use this tool when a firm decides to not provide our staff with documents or information that is necessary to ensure compliance with the Board’s rules as well as with the U.S. law.
Crowe Horwath HK refused to provide assistance to the Board by declining to produce information in response to a formal demand for audit work papers and other documents in relation to the Board’s investigation of an issuer based in China.The Director of PCAOB enforcement and investigations ‘Claudius Modesti’, said that irrespective of their location, the PCAOB is prepared and ready to bring disciplinary action against registered audit firms that refuse to comply with the obligation under the US law to provide information demanded by the PCAOB.