Oct. 23 (Bloomberg) -- Deloitte & Touche LLP, one of the global auditors known as the Big Four, has agreed to pay a record $2 million penalty for allowing a former partner to continue work under a suspension order.
The firm let a suspended auditor keep working as a salaried director, allowing the unnamed employee to review public-company audits and help develop firm-wide policies, the Public Company Accounting Oversight Board said yesterday in a statement. The civil penalty matches the highest ever imposed by the PCAOB, the industry-funded auditing watchdog overseen by the Securities and Exchange Commission.
“When the board suspends an auditor, it does so to protect investors,” said PCAOB Chairman James R. Doty, in a statement. “Considering the magnitude of the penalty, firms should recognize the importance of abiding by the limitations imposed on a PCAOB-suspended auditor.”
Deloitte neither admitted nor denied wrongdoing in the settlement, which also demands it take internal actions to make sure there is no repeat of the situation, the PCAOB said.
“Deloitte took several significant actions to restrict the deployment of this individual,” said Jonathan Gandal, a Deloitte spokesman in an e-mailed statement. “We recognize more could have been done at that time to monitor compliance with the restrictions we put in place. The robust policies and monitoring procedures we have since instituted fully address the issue.”
Deloitte had previously been faulted by the watchdog in 2011 after the firm was accused of repeatedly failing to support assumptions in audits examined in a 2007 inspection.
--Editors: Anthony Gnoffo, Gregory Mott