DELOITTE Philippines said it has implemented corrective actions following the US Public Company Accounting Oversight Board’s (PCAOB) order to fine the professional services firm for exam cheating.
“With regard to the PCAOB decision, Deloitte sets the highest expectations for the conduct of its professionals. Answer sharing on learning assessments is unacceptable and a breach of our ethical code of conduct,” Deloitte Philippines said in an e-mail.
“Deloitte Philippines self-reported these matters to the PCAOB, implemented comprehensive corrective actions, and continues to serve clients with high quality and in accordance with applicable professional standards,” it added.
On Thursday, Reuters reported that PCAOB imposed $2 million in fines on Deloitte Touche Tohmatsu Ltd.’s affiliates in the Philippines and Indonesia. The fines were for “violating the regulator’s rules and quality control standards due to widespread answer sharing on internal training tests.”
It said that the regulator also sanctioned a former national professional practice director at Deloitte Philippines.
In a statement on Wednesday, PCAOB said that it settled three disciplinary orders concerning the three entities as their “quality control deficiencies resulted in widespread answer sharing on internal training tests.”
Since 2021, the PCAOB has sanctioned nine firms for inappropriate sharing of answers on internal training exams.
In the PCAOB order, the regulator said that Deloitte Philippines failed to establish appropriate policies for administering and overseeing internal training tests.
By failing to establish such procedures, the firm was unable to identify that nearly all of its audit partners engaged in improper answer sharing from at least 2017 until early 2019, PCAOB said.
PCAOB also said that the audit professionals either provided answers or received answers in online tests for mandatory internal training courses without reporting them.
However, the regulator said that since the firm has implemented remedial and corrective measures aimed at ending the misdeed, the civil money penalty imposed has been lowered.
These corrective actions include changing quality control policies and ensuring that its personnel don’t engage in improper answer sharing while obtaining degrees of technical training and proficiency.
“Absent this extraordinary cooperation, the civil money penalty imposed would have been significantly larger, and the Board may have imposed additional sanctions,” PCAOB said.
The PCAOB imposed a $1 million penalty on Deloitte Philippines, which must be paid within 10 days of the issuance of the order dated April 10, while it barred the former national professional practice director from being an “associated person of a registered public accounting firm” and required him to pay $10,000. — Justine Irish DP. Tabile
