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July 8, 2014

PCAOB finds former PwC partner guilty of audit standards violation

The Public Company Accounting Oversight Board (PCAOB) has issued a disciplinary order against former PwC partner Randall Stone for violating PCAOB rules and standards.

The order bars Stone from associating with a registered public accounting firm for a minimum period of three years after which Stone can appeal to have the bar lifted. Stone will also have to pay a $50,000 fine.

The order concludes the PCAOB disciplinary proceeding started in December 2012 which looked into PwC’s 2007 audit of medical device manufacturer ArthroCare Corporation .

Stone was the partner in charge of the audit and the PCAOB said in a statement: "The board found that Stone ignored or failed to properly evaluate numerous indicators that should have alerted him to the possibility that ArthroCare was improperly recognising revenue on its 2007 sales of medical devices to DiscoCare, Inc."

Stone failed to exercise due professional care and scepticism when, among other things, he agreed with the company’s proposed accounting for the acquisition without adequately assessing whether such accounting treatment complied with generally accepted accounting principles, the PCAOB statement continued.

Related links:

PwC

PCAOB

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