PCAOB sanctions former Senior Partners of Deloitte Turkey over altered documents
The US watchdog, Public Company Accounting Oversight Board (PCAOB) sanctioned former senior partners at Deloitte who knew about the attempts made by people within the accounting firm to improperly make changes to documents before an inspection in the year 2014, and therefore did nothing to stop it.
The PCAOB has sanctioned former senior engagement partners of Deloitte Turkey in relation to an incident in which improper changes were made to documents ahead of an inspection by the PCAOB in the year 2014.
Gökhan Alpman and Hüseyin Gürer, former partners and CEOs of Deloitte Turkey, were found by the US watchdog to be aware of attempts within the accounting firm to improperly make changes to documents ahead of an inspection in the year 2014 and still made no efforts to stop it. As a direct consequence, the US watchdog barred both Gökhan Alpman and Hüseyin Gürer from associating with any accounting firm registered with the PCAOB.
In the year 2016, Deloitte Turkey reported the entire misconduct to the PCAOB after which the board launched investigation into the said matter.
In December 2017, the PCAOB announced that Deloitte Turkey would be required to pay $750,000 as penalty and charged with quality control and ethics standards violation. The PCAOB Chairman at the time, James R. Doty, said the senior personnel of the accounting firm attempted to prevent the board’s oversight through deception.
The plan involved downloading documents that were archived onto the laptops that were disconnected from the accounting firm’s network and then making the audit teams (whose work was to be reviewed by the board) to access those laptops. The documents were changed and then provided to the Board’s inspectors without informing them about the changes made to the documents.
Following the discovery of this scandal, employees at Deloitte Turkey Şule Firuzment and Berkman Özata were censured for their involvement.
Director of PCAOB enforcement and investigations, Claudius B. Modesti, said that orders announced by the board make clear that former CEOs of Deloitte Turkey directly contributed to the big four firm’s ethical lapses and as a result are facing serious consequences.
The Board said that Deloitte’s decision to report the entire matter ultimately played a key role in them avoiding harsher consequences.
Similarly, Alpman and Gurer were handed reduced sanctions as both men fully co-operated with the Board during investigation.
Another senior partner with the name of Ömer Tanriöver was also barred by the Board for not co-operating with the Board’s investigation team.
Modesti also said that imposition of sanctions on Ömer Tanriöver shows the importance of assisting the board and cooperating with them in their investigations.Gurer can apply to have his sanction lifted after 3 years and Alpman after 2 years, while Tanriöver cannot apply as he is banned for life.
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