PCAOB Fines Four Accounting Firms for Failing to File Form APs

Four audit firms settled with and received sanctions from the Public Company Accounting Oversight Board (PCAOB) for failing to file a Form AP, a document adopted by the PCAOB in late 2015 that requires firms to disclose the name of the lead engagement partner on an audit and whether any other firms were involved in the audit, the regulator said on Oct. 4.

The violations were found during a sweep, which allows the PCAOB to collect information on potential auditing violations from several accounting firms at the same time. In July, PCAOB Board Chair Erica Williams announced that the audit regulator was conducting sweeps as part of its overall effort to strengthen enforcement.

Failure to file Form APs on time is a violation of PCAOB Rule 3211, Auditor Reporting of Certain Audit Participants. All four firms have since filed their Form APs but only after the PCAOB reprimanded them.

“Investors and the public rely on Form AP disclosures to understand exactly who has a hand in the audits of public companies. Timely disclosure is critical for transparency and accountability in our capital markets, and the PCAOB will be vigilant in enforcing disclosure rules,” Williams said.

The firms—which, without admitting or denying the findings, consented to the PCAOB’s orders and the disciplinary actions— that were sanctioned are:

Yarel + Partners: $35,000 civil money penalty and censure
Shanghai Perfect CPA Partnership: $20,000 civil money penalty and censure
James Pai CPA PLLC: $20,000 civil money penalty and censure
Liebman Goldberg & Hymowitz LLP: $20,000 civil money penalty and censure

Each firm also agreed to undertake remedial measures to establish policies and procedures directed toward ensuring future compliance with PCAOB reporting requirements.

“Today’s settlements underscore the importance of timely filing Form APs in order to provide investors with information they need to make informed decisions,” said Mark A. Adler, PCAOB acting director of enforcement and investigations. “This requirement must be taken seriously by audit firms.”