The Public Company Accounting Oversight Board (PCAOB) has sanctioned Marcum Asia CPAs, a firm headquartered in New York, US, for failing to comply with auditing standards and PCAOB rules.
The disciplinary order relates to the firm’s actions during its tenure as the auditor for Gridsum Holding, a Beijing-based company, and the subsequent transfer of workpapers to a successor auditor, Shandong Haoxin Certified Public Accountants in China.
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Marcum Asia CPAs, previously known as Marcum Bernstein & Pinchuk, was engaged by Gridsum in June 2018 to audit the company’s financial statements for fiscal years 2015 to 2017.
Before the audits were finalised, Gridsum replaced Marcum Asia CPAs with Haoxin.
During the transition, Marcum Asia CPAs transferred draft workpapers to Haoxin without establishing a clear understanding of their use, contravening PCAOB’s AS 2610 standard on communications between predecessor and successor auditors.
Haoxin’s subsequent use of the draft workpapers in its audit and the issuance of an unqualified audit report for Gridsum’s financial statements were addressed in a PCAOB enforcement settlement in November 2023.
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By GlobalDataThe PCAOB’s sanctions against Marcum Asia CPAs include censure, a civil penalty of $100,000, and a mandate for the firm to undertake training focused on enhancing communications between predecessor and successor auditors.
In 2023, the Securities and Exchange Commission (SEC) took action against Marcum, related to Marcum Asia CPAs, for systemic quality control failures and audit standard violations across hundreds of special purpose acquisition company clients, dating back to at least 2020.
The SEC’s order highlighted that these issues were part of a wider pattern of quality control failures within the firm. To resolve the charges, Marcum LLP agreed to pay a penalty of $10m.
