By John Filar Atwood
A PCAOB enforcement sweep has resulted in sanctions against four audit firms for their failure to file required Forms AP in connection with audits conducted over several years. Each of Yarel + Partners, Shanghai Perfect CPA Partnership, James Pai CPA, and Liebman Goldberg & Hymowitz agreed to settle the disciplinary actions with admitting or denying the findings.
Under Chair Erica Williams the Board has committed to conducting sweeps as part of a larger effort to strengthen its enforcement program. They allow the Board to collect information on potential violations from many firms at the same time.
In the latest sweep, the staff found that the four firms in question did not timely file Forms AP, which disclose who led specific audits for the firm and whether any other firms were involved in the audits. The PCAOB noted that each firm has since filed the required form, but only did so after receiving notices of deficiencies from the Board.
Failure to file Form AP on time is a violation of PCAOB Rule 3211, Auditor Reporting of Certain Audit Participants. The rule, which applies to audit reports issued on or after January 31, 2017, requires that Form AP be filed within 35 days after the audit report is first included in a document filed with the SEC.
Yarel + Partners. The Israeli audit firm, which is an affiliate of BKR International, failed to file six required Forms AP over a three-year period, according to the PCAOB. The filings were required for Yarel’s audits of Enlivex Therapeutics and Todos Medical.
The Board censured Yarel and imposed a civil money penalty of $35,000. It also required the firm, within 90 days of the PCAOB’s order, to undertake certain remedial measures to establish policies and procedures directed toward ensuring future compliance with PCAOB reporting requirements.
Shanghai Perfect CPA Partnership. The PCAOB found that this Chinese audit firm filed to file three Forms AP over a two-year period related to its audits of ChinaCache International Holdings and Mercurity Fintech Holding. The firm was censured and order to pay a $20,000 penalty. As with Yarel + Partners, Shanghai Perfect CPA must take remedial actions to establish compliance policies and procedures within 90 days.
James Pai CPA. This New York-based audit firm did not file three required Forms AP over a two-year period, the PCAOB determined. The forms were required in connection with its audit of Sino United Worldwide Consolidated Ltd. Along with a censure, the firm must pay a $20,000 penalty. It also must put procedures in place to ensure its future compliance with the PCAOB’s rules.
Liebman Goldberg & Hymowitz. Liebman, based in Garden City, New York, did not make the required filings in connection with its audits of RetinalGenix Technologies and Fuel Doctor Holdings, the PCAOB stated. The firm was censured, must pay a $20,000 penalty, and must take steps to implement policies that ensure its compliance with PCAOB reporting requirements.