Five Times Deloitte Was Penalised Globally For Financial Misconduct

Over the past five years, Deloitte has faced multiple fines and sanctions across several countries for violations and misconduct in its auditing practices. These penalties, imposed by regulators, have highlighted challenges in maintaining compliance with professional standards across its global network.

In April 2024, the Public Company Accounting Oversight Board (PCAOB) fined Deloitte affiliates in Indonesia and the Philippines $1 million each. The fines were issued for exam cheating and other violations, reflecting a lack of adherence to auditing standards and ethical conduct.

PCAOB in July had also criticised Deloitte & Touche LLP for failing to address quality control problems found during 2020 audit inspections. This was the third time in a row that the board had found problems with certain aspects of the firm’s QC system.

In China, Deloitte’s operations faced regulatory scrutiny from both domestic and international authorities. In September 2022, the U.S. Securities and Exchange Commission fined Deloitte’s Chinese affiliate $20 million. The firm was penalised for asking its audit clients to perform their own audit work, a direct violation of auditing standards. This was followed by a March 2023 fine of 211.9 million yuan ($30.8 million) from Chinese regulators for deficiencies in auditing China Huarong Asset Management Co. The regulators cited a failure to apply professional scepticism and maintain audit quality.

In September 2023, Deloitte & Touche S.A.S. in Colombia was fined $900,000 by the PCAOB for quality control violations. The regulator pointed to significant failures in audit compliance and independence standards.

In Canada, Deloitte faced a $1.5-million fine in 2024 after auditors in Ontario breached professional conduct rules. Canadian authorities highlighted lapses in following ethical and procedural guidelines.

In addition, in 2021 the firm had to pay Malaysia's government $80 million to resolve all claims related to its auditing of accounts of the scandal-linked state fund 1MDB and its unit SRC International.

Deloitte was also fined 15 million euros by UK authorities for failing audits of software company Autonomy between January 2009 and 2011.

These cases have raised questions about Deloitte’s ability to enforce consistent standards across its global network. The firm, as part of the Big Four, operates under complex regulatory frameworks in different countries, making compliance a persistent challenge.

Regulatory actions against Deloitte underscore the importance of maintaining accountability and robust internal controls in the audit profession. The penalties also reflect increasing scrutiny by regulators worldwide to ensure auditing firms uphold professional and ethical standards.