The PCAOB inspectors discovered the audit workpapers were finished well after the PCAOB limit of 45 days after the opinion was issued and the engagement partner thought this was appropriate?
The PCAOB announced on 9/14/2022 they had issued a disciplinary order sanctioning the Hay & Watson audit firm and its managing partner, Essop Mia. The order states clearly that
Essop Mia failure to comply with PCAOB rules and standards related to audit documentation and the obligation to cooperate with a Board inspection.
Mia and the Firm failed to assemble a final set of audit documentation within the 45 day period after the audit report was released. It was determined by the PCAOB Inspection Staff that Mia, and others acting at his direction, continued to improperly alter, add to, and backdate work papers months after the documentation completion date had passed. The PCAOB testing of the workpapers documented Mia, and members of the Firm created or modified at least 68 documents after the documentation completion date for the 2019 Audit, including 42 in September 2020 and 18 in October 2020. Of these 68 documents, at least four documents were created after January 29, 2020 and added to the 2019 Audit file.
Mia also subsequently violated PCAOB Rule 4006, Duty to Cooperate with Inspectors, by providing the altered work papers to the Board’s inspectors without disclosing
that they had been altered after the documentation completion date.
Essop Mia and the Firm of Hay and Watson have been permanently been banned from practicing before the SEC. They were also fined $50,000. Maybe they can move to Kansas and sell coal.
