The US Public Company Accounting Oversight Board (PCAOB) has censured PwC, imposing a civil money penalty of $100,000 on the firm. PwC  SC, the auditor’s Mexican firm signed an engagement letter with Banco Santander Mexico in June 2016. However, at least six of PwC Mexico’s partners had personal financial relationships with the bank.

In addition to the fine, the PCAOB  is requiring PwC to take measures to establish, implement, and monitor policies and procedures to provide reasonable assurance of compliance with auditor independence requirements and with audit committee communication requirements.

The six partners were located in the office where the lead audit engagement partner for the engagement primarily practiced, so they were ‘covered persons’ and three of the six partners were in prohibited debtor-creditor relationships with Banco Santander Mexico.

Although the debtor-creditor relationships were discovered by PwC and unwound by September 2015, uninsured brokerage interests were not immediately identified and were not unwound until approximately June 2018, two years after the engagement letter. During those two years, the firm issued audit reports on the bank's 2016 and 2017 financial statements and in both audit reports, the PwC had affirmed that it was independent of the bank.