Global Cases

Around the world regulators are taking a firmer stance against audit firms when there is an audit failure. Disciplinary fines are increasing across the globe, and high profile cases attract significant press attention.

During this process the IRBA has monitored high profile cases around the world in order to ensure that the IRBA’s disciplinary process is aligned to international benchmarks. It became clear that the IRBA penalties were too lenient in comparison to those of international regulators, specifically as it related to the amounts of fines and whether or not publishing details of findings in cases would be in general or specific terms.

The IRBA is currently limited in this regard by the Auditing Profession Act 26 of 2005 which in Section 51(3)(ii) states that the IRBA may “impose on the registered auditor a fine not exceeding the amount calculated according to the ratio for five year’s imprisonment prescribed in terms of the Adjustment of Fines Act 101 of 1991.

While Section 51(5) says that the “Regulatory Board may, if it deems appropriate, publish the finding and sanction imposed in terms of subsection (3)” in practice the disciplinary has handed down sanctions which usually provide for publication of findings and penalties only in general terms.

International fines and links to the articles

Client Country Audit Firm Fine / Sanction Date Failure Link to Article
Various Netherlands KPMG €900 000 03-Jun-13 Audit Quality Article
Standard Chartered USA Deloitte m 19-Jun-13 Auditor Independence on consulting work Article
Standard Chartered USA Deloitte Regulatory Reform 19-Jun-13 Auditor Indedendence; misconduct Article
Partner Anderson / Navistar Financia USA Deloitte $ 2m 23-Oct-13 Audit quality; Violation of bar Article
Farepak UK EY €1m 19-Dec-13 Collapse; Audit Quality Article
Various USA KPMG $ 8.2m 24-Jan-14 Auditor Independence Article
Livent Canada Deloitte Can $ 84.8m 06-Apr-14 Fraud; Audit Qualify; Lawsuit damagers Article
Undisclosed clients USA EY $ 4m 15-Jul-14 Auditor Independence; Improper lobbying Article
Bank of Tokyo-Misubishi USA PwC $ 25m 18-Aug-14 Auditor Independence Article
Sino-Forest Corp Canada EY Can $ 8m 30-Sep-14 Auditor Independence; Insufficient Scepticism Article
Corporate Commercial Bank Bulgaria KPMG $ 120.600 09-Jan-15 Collapse; Audit Quality; Auditor Independence Article
Partner Marsh UK KPMG £39.000 03-Feb-15 Ethics Article
Cable and Wireless UK KPMG £390.000 04-Feb-15 Auditor Independence Article
Pendragon UK KPMG £250.000 04-Feb-15 Auditor Independence Article
Various China Deloitte $ 500.000 09-Feb-15 Non-Compliance Article
Various China EY $ 500.000 09-Feb-15 Non-Compliance Article
Various China KPMG $ 500.000 09-Feb-15 Non-Compliance Article
Various China PwC $ 500.000 09-Feb-15 Non-Compliance Article
MG Rover UK Deloitte £3m (cut from £14m) 13-Apr-15 Collapse; Fraud; Auditor Independence Article
Lehman Bros USA EY $ 10m (+ civil claim $ 99m) 17-Apr-15 Collapse; Fraud; Auditor Independence Article
Hellas Telecommunications Greece (UK) EY £250.000 16-Jun-15 Collapse; Conflict of Interest; Auditor Independence Article
Various USA Deloitte $ 1.1m 02-Jul-15 Auditor Independence Article
Lapple Ireland Ireland Deloitte €41.000 13-Sep-15 Audit Quality Article
FIFA Switzerland KPMG Internal Review 24-Sep-15 Fraud; Audit Quality Article
Bloxham Stockbrokers Ireland Deloitte Under Investigation 17-Oct-15 Collapse; Audit Quality Article
Toshiba Japan EY $ 17.4m 22-Dec-15 Audit Quality Article
Obrascón Huarte Laín Mexico Deloitte $ 233.000 19-Feb-16 Audit Quality Article
Presbyterian Mutual Society Ireland Moore Stephens £200.000 01-Mar-16 Audit Quality Article
Undisclosed Netherlands Deloitte €1.8m 24-Mar-16 Audit Quality Article
Undisclosed Netherlands EY €2.2m 24-Mar-16 udit Quality Article
Undisclosed Netherlands KPMG €1.2m 24-Mar-16 Audit Quality Article
Undisclosed Netherlands PwC €845.000 24-Mar-16 Audit Quality Article
Various Inspections Failures Netherlands KPMG €1.24m 24-Mar-16 Audit Quality Article
Serco UK Deloitte Under Investigation 08-Jun-16 Fraud; Audit Quality Article
Ted Baker UK KPMG Under Investigation 10-Jun-16 Ethics; Auditor Independence Article
BHS UK PwC Under Investigation 27-Jun-16 Collapse; Audit Quality Article
Burril Life Science Capital Fund USA PwC Under Investigation 18-Jul-16 Fraud; Embezzlement; False Audit Reports; Auditor Independence Article
Colonial Bank USA PwC $ 5.5bn 11-Aug-16 Collapse; Fraud; Audit Quality Article
Lebanese Canadian Bank Dubai Deloitte Civil Claim Suit 23-Aug-16 Fraud; Audit Quality; Auditor Independence Article
Cattles UK PwC £2.3m (cut from £3.5m) 31-Aug-16 Near Collapse; Audit Quality Article
Monsanto USA Deloitte Referred by whistleblower 01-Sep-16 Audit Quality; Auditor Independence Article
New Century Group Hong Kong Ltd Hong Kong EY HK $ 30.000 12-Sep-16 Audit Quality; Auditor Independence Article
Partners Bednar, Hartford and Kamienski et al USA EY $ 9.3m 19-Sep-16 Auditor Independence Article
Weatherford International USA EY $ 11.8m 19-Oct-16 Fraud; Audit Quality Article
Ramapo Municipality USA PKF O Connor Davies $ 480.000 01-Nov-16 Fraud; Auditor Independence Article
Aero Inventory UK Deloitte £4m 10-Nov-16 Collapse; Audit Quality; Misconduct Article
Gol Linhas Aéreas Inteligentes Brazil Deloitte $ 8m 05-Dec-16 False reporting; Cover-up; Serious Misconduct Article
Southern Copper Mexico Deloitte $ 750.000 09-Dec-16 Poor documentation Article
RBS Holdings/Reeed Elsevier Netherlands Deloitte $ 300.000 14-Dec-16 Auditor Independence Article
RSM Tenon UK PwC Under Investigation 14-Dec-16 Collapse; Failure to Act with Professional Competence and Due Care Article
Undisclosed Indonesia EY $ 1m 09-Feb-17 Audit Quality; Audit Failure; Non-Cooperation Article
Redcentric UK PwC   27-Feb-17 Under Investigation Article
Lam Research Corporation USA EY $ 87.000 14-Mar-17 Insider Trading Article
Sara Lee Brazil PwC $ 10.000 22-Mar-17 Audit Failure Article
MF Global USA PwC $ 2bn 23-Mar-17 Collapse; Audit Quality; Accounting Article
Daewoo Shipbuilding and Marine Engineering South Korea Deloitte Anjin 12 Month Suspension 27-Mar-17 Accounting Fraud Article
Huishan China KPMG Possible Investigation 11-Apr-17 Business Collapse; Fraud Article
Agrokor Croatia Audit Firm Unknown Under Investigation 12-Apr-17 Suspected Accounting Fraud; Potential Business Collapse Article
Asset Co UK Grant Thornton £2.3m 24-Apr-17 Lack of Professional Scpticism; Poor Audit Quality Article
Wells Fargo USA KPMG Possible Investigation 02-May-17 Unreported Fraud; PCAOB under pressure to Investigate Article
Rolls Royce UK KPMG Investigation Launched 04-May-17 Bribery; Corruption Article
Property Ventures New Zealand PwC NZ $ 4m in Damages 10-May-17 Collapse; Audit Quality; Misconduct; Collusion to avoid Insolvency Article
Connaught UK PwC £5m 11-May-17 Collapse; Lack of Scepticism; Audit Quality Article
2Go Philippines KPMG Investigation 11-Jul-17 Accounting Failure Article
Satyam India PwC Investigation 18-Jul-17 Fraud Article
Merril Lynch USA PwC $ 1m 03-Aug-17 Audit Failure Article
Bank Various Ukraine PwC Revoked Audit Licence for Banks 24-Jul-17 Audit Failure Article
Unnamed Denmark Deloitte Two failed PCAOB Inspections 02-Aug-17 Failed Inspections; Audit Quality Article
Unnamed Hong Kong Crowe Horwarth PCAOB 3-year ban 26-Jul-17 Non-Cooperation with an Investigation Article
Miller Energy Resources USA KPMG $ 6.2m 15-Aug-17 Adit Quality; Overstated Value Article
RSM Tenon UK PwC £5.1m 16-Aug-17 Audit Quality; Audit Failure Article
Mitie UK Deloitte Probe Started 30-Aug-17   Article
Tech Data Limited UK EY £1.8m 17-Oct-17 Professional Scepticism; Audit Quality Article

High profile cases per country