The Public Company Accounting Oversight Board (PCAOB) said it settled disciplinary orders against PKF and three employees after they refused to testify as part of their investigation into the China-based company.
As a result, the US audit regulator censured and revoked the firm’s registration for three years. The employees were also barred from being an associated person with a registered public accounting firm for the same amount of time.
The firm declared it would not testify about the audits because the board had to get the Chinese ministry of finance or China Securities Regulatory Commission’s approval. However, the PCAOB said the firm’s justification was not valid.
Claudius Modesti, PCAOB director of enforcement and investigations, said, “The refusals of PKF and three of its associated persons to cooperate prevented the board from determining whether PKF and its personnel fulfilled their obligations under PCAOB audit standards in an audit relied upon by US investors.”
PKF merged with BDO in 2013. The accountancy firm declined to comment on the issue.