The SEC has issued a $20 million fine against Deloitte-China, for failing to comply with U.S. audit requirements.
In a Sept. 29 announcement, the Securities and Exchange Commission (SEC) penalized Deloitte Touche Tohmatsu Certified Public Accountants LLP (Deloitte-China) for “failing to comply with fundamental U.S. auditing requirements in its component audits of U.S. issuers and its audits of foreign companies listed on U.S. exchanges.”
The announcement revealed that, “In the course of numerous audits, Deloitte-China personnel asked clients to select their own samples for testing and to prepare audit documentation purporting to show that Deloitte-China had obtained and assessed the supporting evidence for certain clients’ accounting entries. This created the appearance that Deloitte-China had conducted the required testing of clients’ financial statements and internal controls when there was no evidence in the audit file that it had in fact done so.”…