PricewaterhouseCoopers (PwC) Greece has reached a settlement with the Public Company Accounting Oversight Board (PCAOB), agreeing to pay $3 million in response to allegations of lapses in due professional care and appropriate skepticism during an audit of marine fuel logistics company Aegean Marine Petroleum Network in 2016. The PCAOB, in a press release, disclosed that Nicos George Komodromos, the engagement partner for PwC Greece on the audit, was individually fined $80,000 and barred from association with a registered public accounting firm for two years.
The issues at hand stem from Aegean Marine Petroleum Network's records, revealing fuel transactions with four counterparties in the United Arab Emirates. The company reported selling fuel to these counterparties at a higher price than its purchase cost. Despite encountering concerns and red flags during the audit, the PwC Greece team, led by Komodromos, proceeded to issue an audit report on Aegean's financial statements without obtaining sufficient audit evidence.
The PCAOB also cited PwC Greece for documentation failures related to PwC Dubai's attempts to verify the office addresses of the counterparties provided by Aegean. The Dubai team found no evidence of the counterparties at the reported locations, but PwC Greece allegedly disregarded this information.
As part of the settlement terms, PwC Greece has agreed to undergo pre-issuance reviews by a third party for each issuer audit in which the firm is involved. Additionally, the firm is required to mandate additional hours of professional training for staff engaged in audits. PwC Greece settled with the PCAOB without admitting or denying the findings. The firm was not immediately available for comment.
This settlement is significant in the context of regulatory scrutiny on audit firms, and it highlights the consequences of alleged audit failures on a global scale.
By fLEXI tEAM