PCAOB finds faults in more than half of PwC Canada, BC accounting firms' audits
US audit watchdog releases inspection reports with multiple deficiencies for PwC Canada, De Visser Gray LLP, and Harbourside CPA LLP
TORONTO, September 17, 2023 – The Public Company Accounting Oversight Board in the United States has released its inspections reports for three Canadian firms and found widespread deficiencies. The audit watchdog found faults with five out of eight audits conducted by the Canadian arm of Big Four accounting firm PricewaterhouseCoopers in 2022.
The PCAOB also found deficiencies in the audits of two Vancouver-based firms, De Visser Gray LLP, and Harbourside CPA LLP.
The PCAOB inspected eight PwC Canada audits — seven in which the firm was the principal auditor — and found deficiencies in five (63% with Part I.A deficiencies). In comparison, the PCAOB inspected seven PwC Canada audits in 2020, and found zero deficiencies. As reported by Canadian Accountant, the firm scored a regulatory achievement, with a clean inspection report from the PCAOB.
The report singles out PwC Canada’s audit of “Issuer A,” an oil and gas company undergoing a “business combination,” for failing to vet the energy company’s estimate of its oil and gas reserves. Inspectors cited the firm for multiple deficiencies with respect to long-lived assets as the firm did not vet the findings of the reserve engineer’s findings.
De Visser Gray and Harbourside CPA do worse than PwC Canada
The inspection reports for De Visser Gray and Harbourside CPA continue a trend. As reported by Canadian Accountant, in Another BC accounting firm punished by audit regulators, audit watchdogs on both sides of the border have been cracking down on BC firms through monetary penalties, new client bans and, in the cases of K.R. Margetson and Hay & Watson respectively, deregistration.
The PCAOB found deficiencies in 67% of three audits conducted by De Visser Gray and 100% of three audits conducted by Harbourside CPA in 2022. Harbourside had not been inspected before. As previously reported by Canadian Accountant, homegrown national firm MNP poached three partners from Harbourside in 2022, and the firm lost several clients to a US accounting firm.
Both PwC Canada and De Visser Gray provided a written response to the PCAOB. Harbourside did not.
Colin Ellis is a contributing editor to Canadian Accountant.