PracticeAuditPCAOB makes first registration refusal

PCAOB makes first registration refusal

The first refusal to register an accounting firm for audit work has been made by the US Public Company Accounting Oversight Board.

Link: PCAOB approves non-US deadline extension

The PCAOB said it had disapproved the application of Arizona-based firm James C. Marshall PC because the firm failed to respond ‘adequately and appropriately to identified deficiencies in its audit work’.

According to the board the firm received its second adverse peer review in 2001, resulting in the firm agreeing to have a concurring reviewer perform pre-issuance reviews of all its SEC engagements.

But it then went on to issue seven audit reports between 2002 and 2003 without having reviews performed by a concurring reviewer as per the agreement. This resulted in its expulsion from the American Institute of CPAs, with an appeal against the decision denied.

In a notice issued the PCAOB said: ‘Marshall has demonstrated an unwillingness or inability to comply with the reasonable requirements, imposed by a professional body responsible for reviewing Marshall’s audit work, to take corrective steps concerning deficiencies in Marshall’s audit work.’

‘Marshall has demonstrated a lack of candour with the board and a failure to give sufficient care to fundamental requirements of the board’s rules,’ it added.

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