• Register
Return to: Home > News > Assurance and Accounting > PCAOB announces $1m settlement with Indonesian EY member

PCAOB announces $1m settlement with Indonesian EY member

The Public Company Accounting Oversight Board (PCAOB) has announced that it has censured and imposed a $1m civil penalty on KAP Purwantono, Suherman & Surja an Indonesian member of EY global network.

The settlement was regarding audit failure, non-cooperation, and violations of Quality Control Standards. Two audit partners were sanctioned following the investigation over their roles in the failure, including a former practice director for EY’s Asia Pacific region, James Randall Leali, and a former engagement partner, Roy Iman Wirahardja.

The case involved the 2011 audit of an Indonesian telecommunications company. An EY partner, in the US, informed the engagement partner of the failures while performing a review required by PCAOB standards. Despite the review partners concerns, the practice director authorised the engagement partner to release the audit report.

The company failed to provide sufficient evidence to support the accounting for more than 4,000 leases for spaces on cellular towers. EY Indonesia then released its audit opinion without obtaining completed analysis.

Wirahardja was censured and fined $20,000, with a five year ban from any association with a PCAOB registered firm. Leali was also censured and fined $10,000, with a one year restriction. Neither admitted or denied the allegations.

PCAOB chairman, James R. Doty said: “Reliable audits are critical to providing investors a basis for confidence to participate in U.S. public capital markets. PCAOB standards and oversight are key protections for investors in U.S. securities.”

Dozens of new audit work papers were created improperly by members of the EY Indonesia engagement team shortly before the 2012 PCAOB audit inspection. EY Indonesia and the engagement partner did not cooperate with the Board's inspection and investigation.

"In their haste to issue audit reports for their client, the firm and two partners shirked their fundamental duty to obtain sufficient audit evidence," said Claudius B. Modesti, director of the PCAOB Division of Enforcement and Investigations.

Top Content

    Brazil: regulation and technology form basis for recovery

    Opportunities in the capital markets and the ever-growing influence of technology are expected to have a significant impact on the Brazilian accounting profession over the next 12 months, writes Paul Golden.

    read more

    Mentoring support and the opportunity to delegate

    Jon Lisby will be known to many from his former role as CEO of Kreston International. Here, he explains the background to his new venture, Global Alliance Advisory Services (GAAS), and how he aims to offer support to alliance CEOs.

    read more

    Global by name, global by nature

    Stephen Heathcote became chief executive officer of PrimeGlobal on 1 June 2019. Robin Amlôt met him to discuss the various new challenges that he has taken on, and his ambitions for the association.

    read more

    ARGA team, assemble!

    The new top team has been named that will see in root-and-branch reform at the Financial Reporting Council (FRC) as it transforms into the Audit, Reporting and Governance Authority (ARGA). Will the new duo be as dynamic as some are hoping? Robin Amlôt reports.

    read more

    CORONAVIRUS TIMELINE: REACTIONS FROM THE ACCOUNTANCY PROFESSION

    As the Coronavirus (COVID-19) continues to spread across the world, the International Accounting Bulletin and The Accountant will be collating all the latest news and updates from the profession on the pandemic’s impact.

    read more
Privacy Policy

We have updated our privacy policy. In the latest update it explains what cookies are and how we use them on our site. To learn more about cookies and their benefits, please view our privacy policy. Please be aware that parts of this site will not function correctly if you disable cookies. By continuing to use this site, you consent to our use of cookies in accordance with our privacy policy unless you have disabled them.