PCAOB fines PwC Israel for test cheating

Who says cheating doesn’t pay?

The Public Company Accounting Oversight Board (PCAOB) announced a $2.75 million disciplinary settlement with PwC Israel for test cheating that lasted for five years.

According to a PCAOB news release, the firm violated “quality control standards related to integrity and personnel management.” PwC Israel, also known as Kesselman & Kesselman CPAs, “failed to detect or prevent extensive, improper answer sharing on tests for mandatory internal training courses” between 2017-2022, the board alleged.

Hundreds of employees during that period improperly shared or received access to test questions or answers. The training courses were “related to the firm’s U.S. auditing curriculum, professional independence, and professional ethics.”

As part of the sanction agreement, PwC Israel did not admit or deny any wrongdoing. In addition to the fine, the firm is required to “review and improve” its QC policies and procedures and report that it’s made those changes to the board within 150 days.

“Integrity is fundamental to effective auditing,” Robert Rice, director of the PCAOB’s enforcement and investigations division, said in a statement. “Investors must be able to trust that auditors will act with integrity when performing their professional duties.”

PCAOB has, since 2021, taken action against 10 firms for “deficiencies related to the inappropriate sharing of answers on internal training exams,” according to the release.