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The Public Company Accounting Oversight Board (PCAOB) has imposed a $2.75m (£2.18m) fine on PwC Israel for violating its quality control standards, having engaged in training exam misconduct.
According to the US industry watchdog, the firm failed to detect or prevent improper answer sharing on tests for mandatory internal training courses from 2017 to 2022.
Erica Williams, chair of the PCAOB, said: “The PCAOB will not tolerate cheating or other unethical behavior at PCAOB-registered audit firms, regardless of whether the firm is located in the United States or abroad.
“We will hold firms accountable when they put investors at risk by failing to comply with the PCAOB’s quality control standards.”
Over the five-year period, it was discovered that hundreds of individuals from PwC Israel engaged in improper answer sharing by either providing access to test questions or answers, or by receiving such access – in connection with online tests for mandatory internal training courses related to the firm’s US auditing curriculum, professional independence, and professional ethics.
Since 2021, the PCAOB has sanctioned 10 registered firms for quality control deficiencies related to the inappropriate sharing of answers on internal training exams.
Robert Rice, director of the PCAOB’s division of enforcement and investigation, added: “Integrity is fundamental to effective auditing. Investors must be able to trust that auditors will act with integrity when performing their professional duties.”
Without admitting or denying the findings in the order concerning the improper answer sharing, PwC Israel agreed to pay the million-dollar penalty charge.
As a result, the firm is required to review and improve its quality control policies and procedures to provide reasonable assurance that its personnel act with integrity in connection with internal training, and to report to the PCAOB that it has done so within 150 days.
