the fines that were issued against Deloitte China for Audit Failures.
This is very recent, so I figured it would be a good topic of discussion.
Deloitte China, or Deloitte Touche Thomatsu Certified Public
Accountants LLP are an audit firm based in China that were not
following proper audit procedures. During audits, Deloitte China was
asking clients to select their own sample data for testing rather than
selecting the data themselves and requesting the required backup. In
total, there were 21 occurrences of Deloitte China asking the client to
prepare data that the auditors were required to prepare themselves.
Due to this violation, they were find greatly by SEC (they are settling
on $20 million in fines). SEC found that junior and senior auditors
were at fault for this, which was a result of lack of supervision from
audit partners.
The audit failure occurred due to lack of training and supervision on
the fault of the audit partners. The junior and senior auditors were not
under proper direction during the audits, so wrongful acts were
committed as a result. The best way to correct this problem is to
ensure that both junior and senior auditors have proper supervision
throughout the entire audit - from the preliminary stages to the final
audit stages.
Reference:
Sjanifer. (2022, September 30). SEC fines Deloitte China for audit
failures. Thomson Reuters Tax & Accounting News. Retrieved
October 30, 2022, from https://tax.thomsonreuters.com/news/sec-
fines-deloitte-china-for-audit-failures/
