This Monday the Public Company Accounting Oversight Board (PCAOB) issued orders instituting disciplinary proceedings against Deloitte & Touche LLP and a former Deloitte audit partner, for violations of the Board’s interim auditing standards in connection with the firm’s 2003 audit for a large pharmaceutical concern.  Without admitting or denying the Board’s findings, Deloitte consented to an order imposing a $1 million civil money penalty; it has also implemented changes to its internal policies and procedures for addressing potential audit quality concerns.  The orders require Deloitte to undertake certain documentation practices relating to these additional quality control policies and procedures, and the audit partner involved “has consented to an order barring him from being an associated person of a public accounting firm that is registered with the PCAOB."  The Board’s orders are available here.

The PCAOB has also just released a Staff Audit Practice Alert on the audit of fair value measurements in financial statements.  The alert provides auditors with information related to auditing fair value measurements and disclosures as well as the use of specialists in this area.  See Matters Related to Auditing Fair Value Measurements of Financial Instruments and the Use of Specialists.