Firm lacked appropriate policies procedures; failed to take appropriate action, says CPA
Deloitte has admitted to breaches of the CPA Ontario Code of Professional Conduct and will pay $1.5 million in fines and costs.
Several auditors at the global consulting firm changed the date and time settings on their computer clocks to manually override controls in Deloitte’s audit software and backdate audit working paper signoffs. More than 930 working papers were backdated in at least 39 audit engagements.
This happened between November 2016 and May 2018, according to CPA Ontario, the regulatory body responsible for the licensing and oversight of chartered professional accountants and accounting firms in Ontario.
“Backdating obscures when and what work was performed and reviewed. It creates questions about the accuracy or timeliness of audit documentation and the quality of the audit,” said Janet Gillies, executive vice-president, Regulatory and Standards, CPA Ontario.
“Holding firms and members accountable for their actions with admissions-based discipline is just one way we achieve our mandate to protect the public and uphold the reputation of the profession.”
‘Failed to take appropriate action’ to address issues
Deloitte has admitted it failed to have the necessary policies and procedures in place to ensure its services were performed in accordance with generally accepted standards of practice of the profession, said CPA Ontario, including maintaining accurate and timely audit documentation, and ensuring that its audit practitioners conduct themselves in a manner that maintains the good reputation of the profession and serves the public interest.
“It also failed to take appropriate action to address potential issues of audit quality once it became aware that a number of its practitioners engaged in backdating audit working papers, and, in its own investigation, failed to adequately consider and address the risk of ethical issues arising from deliberate backdating.”
As per the terms of the settlement, Deloitte will pay a fine of $900,000 and costs of $685,000 to CPA Ontario.
“Deloitte Canada serves its clients with integrity. We work ethically, stand by our credibility, and have worked hard to earn and maintain the trust of clients, regulators, and the public,” a spokesperson from Deloitte wrote in an emailed statement to the Toronto Star.
