A Deloitte partner has been barred from the profession for two years, and the firm given a $1m (£480,000) penalty over its audit of Ligand Pharmaceuticals in 2003.

The Public Company Accounting Oversight Board yesterday issued orders against the firm and the former audit partner, James L. Fazio, for breach of the board's interim auditing standards.

The audit had failed to properly assess the company's accounting for product returns, the body said.

'Mr. Fazio failed to perform appropriate and adequate audit procedures related to Ligand’s reported revenue from sales of products for which a right of return existed and failed to supervise others adequately to ensure the performance of such procedures.,' the PCAOB said in a statement.

'In evaluating the reasonableness of Ligand’s estimates of future returns, Mr. Fazio neither performed nor ensured the performance of procedures that adequately took into account the extent to which Ligand had consistently and substantially underestimated its product returns,' it added.

Fazio cannot become an 'associated person' of a registered PCAOB accounting firm for two years, when he may reapply to the board, it said.

The firm, without admitting or denying the board's finding, consented to a $1m penalty. It has also implemented changes to its practices and will carry out further improvements to the way it documents quality control, the board said.

Further Reading:

Read the PCAOB's statement