The Public Company Accounting Oversight Board issued a disciplinary order permanently barring CPA David A. Aronson from associating with a registered public accounting firm, and permanently revoking the registration of his firm, David A. Aronson CPA PA.
The sanctions are the result of “repeated violations of auditor independence and engagement quality review requirements,” the board noted in a statement. Among other things, the board found that the North Miami Beach, Fla.-based Aronson and his firm had issued audit reports related to public companies for which Aronson’s son had acted in an accounting role during the period under audit.
"Independence is essential to maintaining auditor objectivity and public confidence in the audit process," said Claudius Modesti, director of the Division of Enforcement and Investigations, in a statement. "When an auditor or a close family member has an employment relationship with the audit client, independence principles are compromised."
The board also found that the firm and Aronson failed to obtain an engagement quality review in 10 separate audits. The violations continued even after they were put on notice of the failures to obtain engagement quality reviews during two different inspections, where the firm agreed to inspectors' conclusions that no engagement quality review had been conducted. A further violation occurred during the board's investigation of the matter.
"Auditors must abide by the board's requirement for an engagement quality review," Modesti said. "This is a clear and well understood requirement of Auditing Standard No. 7."
According to the board, the settled disciplinary order is the first it has issued in which the settling respondent admitted to the order’s facts, finding and violations. All previous settled orders have included language noting that the respondents neither admitted nor denied the board's findings.
"Obtaining admissions from auditors who engage in egregious misconduct enhances accountability and serves the interests of investors," said Modesti. "Here, Aronson and his firm engaged in precisely that sort of misconduct, violating clear requirements and standards and continuing to do so even after repeated notice."
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