PCAOB bans more Deloitte Turkey senior partners



Julia Irvine

11 May 2018 09:40am

Three former senior partners of Deloitte Turkey have been barred from associating with accounting firms that are registered with the US audit watchdog

The Public Company Accounting Oversight Board (PCAOB) found that two of them, Hüseyin Gürer and Gökhan Alpman, both of whom had served as chief executives of the national practice, had been aware of a plot at the firm to improperly alter documents ahead of a PCAOB inspection in 2014 but had done nothing to prevent it from happening.

Both were censured and Gürer was fined $25,000 (£18,533). Gürer and Alpman can apply to have their bans lifted after three and two years respectively.

 However, the third senior partner, Ömer Tanriöver, who was Deloitte Turkey’s former risk and reputation leader, was barred permanently for failing to cooperate with a PCAOB investigation into  the matter.

None of the three admitted or denied the PCAOB’s findings.

The improper alterations eventually resulted in the firm having to pay a $750,000 civil money penalty to the board to settle the charges. Two other partners, the firm’s national professional practice partner Berkman Özata and the engagement partner who altered the documents, Şule Firuzment, were both barred and censured last year.

Commenting on the latest settlement, PCAOB chairman William Duhnke said that audit firms and their staff had a “fundamental duty” to act with integrity. The senior leadership was required to set the culture and tone for the audit practices they oversaw and would be held accountable if they failed in their responsibilities.

“The orders make clear that, far from setting an appropriate tone at the top, Deloitte Turkey’s former CEOs directly and substantially contributed to the firm’s ethical lapses and are facing the serious consequences of that behaviour,” added PCAOB director of enforcement and investigations Claudius Modesti.

“In addition, the imposition of the severest of sanctions on the firm’s former risk and reputation leader demonstrates the importance of cooperating with PCAOB investigations.”

When the firm heard that the PCAOB was coming to inspect some of its audit work for the first time in 2014, several of its senior partners hatched a plot to let the three teams that had carried out the audit work improperly alter their audit documentation.

They planned to download archived documentation onto laptops that were not connected to the firm’s network which the teams would then be able to access.

As a result, Firuzment was able to change the date and time settings on the laptop as well as altering numerous documents. These were then given to the PCAOB inspectors who were not told of the alterations.

Firuzment was persuaded to make the changes after an unnamed senior partner told her that deficiencies in the engagement work papers would lead the PCAOB to issue negative comments that could affect her career and lead to monetary sanctions and reputational damage to the firm.

In a statement, the firm said, “Deloitte Turkey self-reported this matter to the PCAOB, fully cooperated with the PCAOB’s investigation, and is pleased that it is now concluded.

“The conduct of these three individuals was wholly incompatible with our culture, and they are no longer with the firm. We remain focused on adherence to the highest standards of professionalism in the work we do for our clients, and ensuring full confidence in the quality of our audits.”

Under the US Sarbanes-Oxley Act, the PCAOB is required to inspect firms registered with it as auditors of companies listed on US stock exchanges.


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