CMVM intensifies unscheduled supervisory actions against auditors triggered by complaints
The auditors were sentenced to fines of 315 thousand euros by their supervisor, the Securities Market Commission, in the 2023/2024 supervision cycle, which runs from July last year to June this year. A year in which more supervisory actions were opened by the entity due to complaints and current events.
Fines of 315 thousand
The fines imposed in this period were 315 thousand. However, a small portion was suspended, so they only had to pay 285 thousand euros. There were nine cases in which this happened, meaning the average fine was 34 thousand euros. None of those targeted contested.
These were data revealed this Wednesday, September 25th, by the administrator of the Securities Market Commission (CMVM) João Miguel Almeida, in a meeting with journalists. In addition to those nine sentences, the highest of which was 75 thousand euros, there was also a warning. There were four other administrative offense cases decided last year that were archived.
The CMVM does not indicate which companies and auditors are in question, and in individual disclosures they also disclose anonymized names. Furthermore, if there is no challenge to the court, as happens in all these cases (“no process was subject to judicial challenge”), the processes do not enter the public domain.
The sum of fines applied in this cycle is higher than those recorded in the previous cycle, which totaled 285 thousand euros in eight cases.
19 very serious offenses
In relation to open processes, “in 2023, 19 very serious administrative offenses related to non-compliance with duties stand out”, according to the CMVM. The largest of the infractions (eight cases) is due to failures “to assess and document the existence of threats to independence”.
There are issues that were more worrying in previous years, such as the rotation of auditors that, nowadays, no longer cause tension: “While it was not stabilized, it generated many administrative offenses. It is not an area where we now have a relevant risk. It is one of the areas of supervision in which the risk has decreased”, explained José Miguel Almeida.
Even so, the comparison with the previous year is significant, as there had only been one very serious offense. On the contrary, serious administrative offenses decreased in strength from one year to the next.
According to the report, there are still “recurring weaknesses” in the world of auditing, such as “inadequate documentation of analyzes and challenges to the assumptions underlying significant accounting estimates”, and “insufficiencies in identifying and mitigating threats to the independence of auditors”.
More specific actions
During this one-year period, the CMVM indicates that it carried out 48 supervisory actions. But not all of them were planned.
“There was an intensification of specific supervisory actions, motivated by specific market events, such as complaints and other situations involving auditors. It was the necessary response to the identified risks and consistent with the CMVM’s action being even more risk-based”, according to the report.
Of the 48 actions, 23 were “punctual”, much more than the five in the previous cycle.
One of the facts that the auditors regulator admits that Inapa is facing insolvency, taking into account that, as a listed company, it also had accounts certified by PwC.
