NEW YORK (Reuters) -The U.S. Public Company Accounting Oversight Board said on Tuesday it had revoked the license of a Hong Kong firm and barred its owner for violating audit rules related to companies operating in China, including Luckin Coffee Inc.
The PCAOB said in a statement it had sanctioned Centurion ZD CPA & Co and its owner Chan Kam Fuk and hit them with a civil penalty of $75,000 for violating the board’s rules and standards in connection with its audit work for three firms.
The auditor failed to properly assess risk and get sufficient audit evidence from Luckin in a 2022 opinion of the firm’s 2021 financial reporting, the PCAOB said. The Chinese coffee firm in 2020 had settled accounting fraud charges with the SEC. The firm and Chan failed to use information about the fraud in the subsequent year’s audit, PCAOB said.
Centurion also violated PCAOB standards in connection with the audit of a second Chinese company and with audit procedures for some subsidiaries of a Malaysian firm, the PCAOB said.
Chan and Centurion did not admit or deny the findings. A lawyer for both did not respond immediately to request for comment.
(Reporting by Chris Prentice; Editing by Mark Porter)
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