The Public Company Accounting Oversight Board barred two former senior partners and CEOs at Deloitte Turkey after the firm was found to have improperly altered documents ahead of a PCAOB inspection.
The PCAOB found that the partners, Hüseyin Gürer and Gökhan Alpman, who both served as chief executive officers of Deloitte Turkey (officially known as DRT Bagimsiz Denetim ve Serbest Muhasebeci Mali Musavirlik A.Ş.), were aware of the firm’s effort to change the documents in advance of a 2014 PCAOB inspection, but they didn’t try to stop it. The document changes ultimately led to charges against the firm and two other former officials. The PCAOB barred Gürer and Alpman from associating with a PCAOB-registered firm. They could not be reached for comment.
Deloitte Turkey told Accounting Today it had reported the matter to the PCAOB itself. “Deloitte Turkey self-reported this matter to the PCAOB, fully cooperated with the PCAOB’s investigation, and is pleased that it is now concluded,” said a statement forwarded by spokesperson Leyla Gülyurt. “The conduct of these three individuals was wholly incompatible with our culture, and they are no longer with the firm. We remain focused on adherence to the highest standards of professionalism in the work we do for our clients, and ensuring full confidence in the quality of our audits.”
The PCAOB also barred a third senior partner, Ömer Tanriöver, the former risk and reputation leader at Deloitte Turkey, Thursday for failing to cooperate with a PCAOB investigation of the matter.
“Audit firms and their personnel have a fundamental duty to act with integrity. That integrity begins with their senior leaders and the tone they set for the audit practices they oversee,” said PCAOB Chairman William D. Duhnke in a statement. “When firm leadership fails in its responsibilities, the board will take appropriate action to hold that leadership accountable.”
Along with being barred from associating with a PCAOB-registered auditing firm, Gürer was fined $25,000. Gürer and Alpman can apply to have their bars lifted after three and two years, respectively, although Tanriöver’s bar is permanent because he refused to provide information in response to demands from PCAOB investigators. The PCAOB orders also censured Gürer, Alpman, and Tanriöver. They neither admitted nor denied the findings in the PCAOB orders.
“The orders announced today make clear that, far from setting an appropriate tone at the top, Deloitte Turkey's former CEOs directly and substantially contributed to the firm's ethical lapses and are facing the serious consequences of that behavior,” said PCAOB Enforcement and Investigations director Claudius B. Modesti in a statement. “In addition, the imposition of the severest of sanctions on the firm's former risk and reputation leader demonstrates the importance of cooperating with PCAOB investigations.”
Last December, the PCAOB issued orders finding that the firm and two other former partners improperly altered documents intended for review by PCAOB inspectors. At the time, the PCAOB credited the firm and the former partners with providing extraordinary cooperation in the investigation, so they received reduced sanctions.
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