backOn November 8, 2024, without admitting or denying findings, the mainland China-based firm, JTC Fair Song CPA Firm, settled with the PCAOB for repeated violations of PCAOB rules by failing to make requisite filings and for failing to cooperate with an investigation into those reporting violations.
Pursuant to PCAOB Rule 3211, Auditor Reporting of Certain Audit Participants, registered public accounting firms must provide information about engagement partners and other accounting firms that participate in audits of issuers by filing a Form AP no later than the 35th day after the audit report is included in a document filed with the SEC. According to the PCAOB, the firm failed to timely report the participants in its issuer audits on multiple occasions. Additionally, PCAOB Rule 2201, Time for Filing of Annual Report, requires that registered public accounting firms file an annual report with the Board on Form 2 by no later than June 30 of each year. According to the PCAOB, the firm also failed to timely file its annual reports for 2021, 2022, and 2023. Moreover, when the Board’s Division of Enforcement and Investigations attempted to investigate these violations, the firm reportedly failed to cooperate with the investigation, in violation of Rule 5110, Noncooperation with an Investigation, by refusing to produce documents and information in response to formal demands.
The PCAOB censured the firm and revoked the firm’s registration. The Board imposed no civil money penalty, after considering the firm’s financial resources, but would have imposed a $50,000 civil money penalty otherwise. Additionally, the order is contingent upon the accuracy and completeness of the financial information provided to the Board’s Division of Enforcement and Investigations.
The PCAOB press release is available here, and the settled order is located here.