Former Deloitte Partner Penalized by PCAOB for Audit Failures in Bancolombia Case

A former Deloitte partner has been fined $75,000 and barred from working as a registered public company accountant for two years following violations of audit standards during a 2016 audit, according to the Public Company Accounting Oversight Board (PCAOB).

Gabriel Jaime López Díez, who was previously a partner at Deloitte in Colombia, “failed to perform necessary audit procedures and failed to obtain sufficient appropriate audit evidence before authorizing the issuance of the firm’s unqualified audit opinions” in relation to Bancolombia’s 2016 financial statements, the PCAOB stated in a press release on Wednesday.

Deloitte itself had already agreed to pay $900,000 in 2023 to resolve allegations from the PCAOB that the firm’s quality control system had failed to ensure compliance with PCAOB standards during the same 2016 audit of Bancolombia. Additionally, the PCAOB found that certain Deloitte team members involved in the Bancolombia engagement had financial conflicts of interest, including mortgage loans or brokerage accounts held with the bank.

According to the PCAOB’s disciplinary order, López and his engagement team “improperly altered audit documentation prior to the documentation completion date, and in several instances, performed audit procedures or obtained supporting audit evidence after issuance of the audit opinions” in violation of PCAOB standards.

“If an auditor signs an audit opinion without having done the work necessary to support that opinion, investors are put at risk,” said PCAOB Chair Erica Williams in the release. “The PCAOB will take action to hold auditors accountable when they fail to prepare informative, accurate, and independent audit reports.”

López has consented to the order and agreed to pay the fine, while neither admitting nor denying the board’s findings. 

By fLEXI tEAM