PCAOB fines PWR CPA for audit failures and reporting violations

The Public Company Accounting Oversight Board (PCAOB) has imposed sanctions on PWR CPA for breaches of its regulations during the 2022 audit of Ainos, alongside repeated non-compliance with reporting obligations for four other issuer audits.

The disciplinary order, issued as a settled matter, was announced in a PCAOB statement.

PWR CPA agreed to a $60,000 fine and committed to implementing corrective measures before submitting any future PCAOB registration application.

The firm neither admitted nor denied the findings outlined in the order.

The oversight board identified several violations in PWR’s audit of Ainos for the year ending 31 December 2022.

These included a failure to carry out necessary risk assessment procedures, inadequate evaluation of certain issues for designation as critical audit matters, and a lack of inquiries with Ainos’ audit committee regarding fraud risks.

PCAOB standards mandate that auditors perform sufficient risk assessments to identify material misstatement risks, whether due to error or fraud, and to design appropriate audit procedures to safeguard investors.

Oversight board chair Erica Williams said: “When auditors fail to appropriately evaluate fraud and other risks, they undermine investor protection.”

The oversight board noted that PWR’s shortcomings heightened risks to investors.

Additionally, the PCAOB found that PWR failed to submit nine required Form APs on time, which disclose specific audit participants.

The firm also neglected to file a mandatory Form 3 to report the appointment of a partner previously barred by the Securities and Exchange Commission (SEC) from practising as an accountant before the agency.

The investigation was conducted by PCAOB enforcement staff members Davis Taylor, Celia Lawson, and Sina Mansouri, under the supervision of William Ryan and John Abell.

PCAOB Enforcement and Investigations division director Robert Rice said: “Firm personnel must conduct audits in accordance with PCAOB rules and standards, particularly when evaluating potential fraud risks.

“This case is another example of the PCAOB holding firms accountable for violations of core PCAOB rules and standards.”

"PCAOB fines PWR CPA for audit failures and reporting violations" was originally created and published by International Accounting Bulletin, a GlobalData owned brand.

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