United States Public Company Accounting Oversight Board Fines Deloitte Indonesia & Philippines $1 Million Each For Cheating in Online Tests By Sharing Answers, Deloitte Director Wifredo Baltazar Banned For 3 Years
11th April 2024 | Hong Kong
The United States Public Company Accounting Oversight Board (PCAOB) has fined Deloitte Indonesia & Deloitte Philippines $1 million each for cheating in online tests by sharing answers, with Deloitte Director Wifredo Baltazar banned for 3 years. PCAOB: “As described in the PCAOB’s orders, from 2017 to 2019, Deloitte Philippines’s audit partners and other personnel engaged in widespread answer sharing – either by providing answers or using answers – or received answers without reporting such sharing in connection with tests for mandatory firm training courses. Baltazar directly and substantially contributed to Deloitte Philippines’s violations. On at least six occasions, Baltazar, in his capacity as the partner responsible for e-learning compliance, shared answers to training assessments with other audit partners at the firm. (Baltazar has since left the firm.). Additionally, from 2021 to 2023, more than 200 Deloitte Indonesia professionals engaged in answer sharing. The firm’s failure to detect and deter improper answer sharing by its personnel occurred despite numerous warnings from Deloitte Global and regional leadership that answer sharing was impermissible. The above misconduct revealed an inappropriate tone at the top at Deloitte Philippines and a failure by leadership at both firms to effectively promote an ethical culture among the firms’ personnel with respect to improper answer sharing and monitoring of the firms’ systems of quality control. Without admitting or denying the findings, Deloitte Indonesia, Deloitte Philippines, and Baltazar consented to the PCAOB’s respective orders against them. Deloitte Indonesia and Deloitte Philippines were censured, and each agreed to pay a $1 million civil money penalty. The firms also agreed to review and improve their quality control policies and procedures to provide reasonable assurance that their personnel act with integrity in connection with internal training, and to report their compliance to the PCAOB. Baltazar was censured, barred from being an associated person of a registered public accounting firm with a right to apply to terminate his bar after three years, and agreed to pay a $10,000 civil money penalty. The civil money penalty imposed on Baltazar reflects his financial resources. The PCAOB would have imposed a civil money penalty of $50,000 had it not considered Baltazar’s financial resources.” More info below:
“ United States Public Company Accounting Oversight Board Fines Deloitte Indonesia & Philippines $1 Million Each for Cheating in Online Tests by Sharing Answers with Deloitte Director Wifredo Baltazar Banned for 3 Years “
Robert E. Rice, Director of the PCAOB’s Division of Enforcement and Investigations: “Today’s orders demonstrate that an inadequate tone at the top, particularly with regard to issues of integrity and personnel management, can permeate all levels of a firm.”
PCAOB Chair Erica Y. Williams: “Few things erode trust like impaired ethics. To protect investors, the PCAOB will continue to address serious quality control deficiencies at PCAOB-registered firms around the world.”
United States Public Company Accounting Oversight Board Fines Deloitte Indonesia & Philippines $1 Million Each for Cheating in Online Tests by Sharing Answers with Deloitte Director Wifredo Baltazar Banned for 3 Years
10th April 2024 – The Public Company Accounting Oversight Board (PCAOB) today announced three settled disciplinary orders sanctioning Imelda & Raken (PDF) (“Deloitte Indonesia”), Navarro Amper & Co.(PDF) (“Deloitte Philippines”), and the latter’s former National Professional Practice Director, Wilfredo Baltazar (PDF) (“Baltazar”), for violations of PCAOB rules and quality control standards relating to the firms’ internal training programs and monitoring of their systems of quality control. At both firms, quality control deficiencies resulted in widespread answer sharing on internal training tests. Since 2021, the PCAOB has sanctioned nine registered firms for quality control deficiencies related to the inappropriate sharing of answers on internal training exams.
- As described in the PCAOB’s orders, from 2017 to 2019, Deloitte Philippines’s audit partners and other personnel engaged in widespread answer sharing – either by providing answers or using answers – or received answers without reporting such sharing in connection with tests for mandatory firm training courses. Baltazar directly and substantially contributed to Deloitte Philippines’s violations. On at least six occasions, Baltazar, in his capacity as the partner responsible for e-learning compliance, shared answers to training assessments with other audit partners at the firm. (Baltazar has since left the firm.)
- Additionally, from 2021 to 2023, more than 200 Deloitte Indonesia professionals engaged in answer sharing. The firm’s failure to detect and deter improper answer sharing by its personnel occurred despite numerous warnings from Deloitte Global and regional leadership that answer sharing was impermissible.
- The above misconduct revealed an inappropriate tone at the top at Deloitte Philippines and a failure by leadership at both firms to effectively promote an ethical culture among the firms’ personnel with respect to improper answer sharing and monitoring of the firms’ systems of quality control.
- Without admitting or denying the findings, Deloitte Indonesia, Deloitte Philippines, and Baltazar consented to the PCAOB’s respective orders against them. Deloitte Indonesia and Deloitte Philippines were censured, and each agreed to pay a $1 million civil money penalty. The firms also agreed to review and improve their quality control policies and procedures to provide reasonable assurance that their personnel act with integrity in connection with internal training, and to report their compliance to the PCAOB.
- Baltazar was censured, barred from being an associated person of a registered public accounting firm with a right to apply to terminate his bar after three years, and agreed to pay a $10,000 civil money penalty. The civil money penalty imposed on Baltazar reflects his financial resources. The PCAOB would have imposed a civil money penalty of $50,000 had it not considered Baltazar’s financial resources.
PCAOB enforcement staff members David Florenzo, Jennifer Gibbons, and K Lynn Dunston conducted the investigation, supervised by William Ryan and John Abell.
The PCAOB oversees auditors’ compliance with the Sarbanes-Oxley Act, provisions of the securities laws relating to auditing, professional standards, and PCAOB and SEC rules. Further information about the PCAOB Division of Enforcement and Investigations is available on the PCAOB website. Firms or individuals wishing to report suspected misconduct by auditors, or to self-report possible misconduct, may visit the PCAOB Tips and Referrals page.
PCAOB
The PCAOB is a nonprofit corporation established by Congress to oversee the audits of public companies in order to protect investors and further the public interest in the preparation of informative, accurate, and independent audit reports. The PCAOB also oversees the audits of brokers and dealers registered with the Securities and Exchange Commission, including compliance reports filed pursuant to federal securities laws.
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