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.”

How well do you really know your competitors?

Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.

Company Profile – free sample

Thank you!

Your download email will arrive shortly

Not ready to buy yet? Download a free sample

We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form

By GlobalData
Visit our Privacy Policy for more information about our services, how we may use, process and share your personal data, including information of your rights in respect of your personal data and how you can unsubscribe from future marketing communications. Our services are intended for corporate subscribers and you warrant that the email address submitted is your corporate email address.

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.