The Brazilian unit of accounting group Deloitte will pay US regulators US$8m to settle civil charges that it issued and attempted to cover up false audit reports.
The US Public Company Accounting Oversight Board (PCAOB) a watchdog created by the 2002 Sarbanes-Oxley Act said the fine against Deloitte Touche Tohmatsu Auditores marked the largest civil penalty it has ever imposed. It has also separately sanctioned 12 former partners and other officials for their role in the scheme.
All but one of the 12 have been barred or suspended from working in the industry, the PCAOB added.
Deloitte Brazil is the first global network firm to admit to wrongdoing in a settlement, the first to be hit with securities fraud charges and the first to be accused of failing to cooperate with a PCAOB probe. At issue in the case are the firm’s “materially false” audit reports for 2010 financial statements issued by an unnamed Brazilian airline corporate client.
“Deloitte Brazil failed in its public watchdog role to protect the interests of investors by issuing materially false audit reports,” said Claudius Modesti, director of the PCAOB division of enforcement and investigations.
The PCAOB said that prior to a 2012 inspection, a partner at Deloitte directed staff to alter work papers and provide regulators with false and misleading information. Multiple others also tried to hide the problems, including by providing false testimony while under oath.
Heloisa Montes, a spokeswoman for Deloitte Brazil, described their conduct as “wholly incompatible with our culture” and said that the individuals involved left the firm as soon as the problems were uncovered.
The firm has also settled parallel charges with Brazil’s securities regulator and its new leadership, which took over last June, “has worked aggressively to uphold the highest standards of professionalism.”
APIs may be a solution to MT940 challenges, says Karen Fagan, treasury operation manager, for British television company, ITV.
The top five sectors Asian fintech investors are interested in are data analytics, blockchain, lending, payments and regtech, according to Gary Hwa, EY regional managing partner.
On the third day of the Singapore Fintech Festival conference, there was a focus on specific applications of fintech innovation. One was trade finance, which is clearly is ripe for a revolution.
Kicking off day two of the Singapore Fintech Festival, Deloitte Chairman David Cruikshank said that fintech is significant for three reasons. First, customer expectations of services are higher than ever. Second, barriers to entry are lower than before. And finally, financial institutions (FIs) face a threat of what a competitor might do.