Deloitte Pays CPA Ontario $1.59M in Fines and Costs for Admitted Breaches of the CPA Ontario Code of Professional Conduct

TORONTO, Oct. 31, 2023 /CNW/ - CPA Ontario, the regulatory body responsible for the licensing and oversight of Chartered Professional Accountants and accounting firms in Ontario, has settled a discipline matter in which Deloitte admitted breaches of the CPA Ontario Code of Professional Conduct (Rule 501 and 502) and paid $1.59M in fines and costs.

A number of Deloitte auditors in Ontario changed the date and time settings on their computer clocks to manually override controls in Deloitte's audit software and backdate audit working paper signoffs between November 2016 and May 2018. During this period over 930 audit working papers were backdated in at least 39 audit engagements.  

Deloitte has admitted it failed to have the necessary policies and procedures in place to ensure its services were performed in accordance with generally accepted standards of practice of the profession including maintaining accurate and timely audit documentation, and to ensure that its audit practitioners conduct themselves in a manner that maintains the good reputation of the profession and serves the public interest. It also failed to take appropriate action to address potential issues of audit quality once it became aware that a number of its practitioners engaged in backdating audit working papers, and, in its own investigation, failed to adequately consider and address the risk of ethical issues arising from deliberate backdating.

Deloitte failed to satisfy the requirements of Canadian Standards on Quality Control 1 by failing to establish and maintain a system of quality control to provide it with reasonable assurance that signoffs were not backdated in contravention of Canadian Audit Standards.

"Backdating obscures when and what work was performed and reviewed. It creates questions about the accuracy or timeliness of audit documentation and the quality of the audit," said Janet Gillies, CPA, CA, executive vice-president, Regulatory and Standards, CPA Ontario. "Holding firms and members accountable for their actions with admissions-based discipline is just one way we achieve our mandate to protect the public and uphold the reputation of the profession."

CPA Ontario has taken into account remediation by Deloitte including relevant enhancements to systems of quality control, internal discipline and mandatory training. As per the terms of settlement, Deloitte will pay a fine of $900,000 and costs of $695,000 to CPA Ontario in respect of its investigation and prosecution.

Deloitte cooperated with CPA Ontario by self-reporting this matter and entering this settlement.

More information on CPA Ontario discipline cases, including the decision document on this case, is available on our website.  

CPA Ontario governs and regulates CPAs and accounting firms in Ontario. We grant CPA designations and public accounting licenses. We enforce the highest professional and ethical standards, provide professional guidance, and support the continuing development of our members. We educate and assess students, so they are ready for market demands. We enable mobility of CPAs through inter-provincial and international agreements. We are a community of over 100,000 CPAs and 20,000 students in Ontario. 

SOURCE Chartered Professional Accountants of Ontario