PwC Canada fined more than $1 million for widespread cheating on internal tests

PwC Canada has been fined US$750,000 by the US Public Company Accounting Oversight Board (PCAOB) and $200,000 by the Canadian Public Accountability Board (CPAB) after 1,200 employees were caught cheating on internal tests.

According to an order from CPAB, from 2016 to 2020, more than 1,200 PwC employees were involved in improper answer sharing for the firm’s internal testing related to technical instruction, professional development, and continuing professional education in auditing, accounting, and independence.

The 1,200 employees ranged from junior staff to partners, though a written statement from PwC Canada CEO Nicolas Marcoux notes the transgressors were “primarily junior-level Assurance employees.” 1,100 were members of the Big Four firm’s assurance business.

Individuals shared answers for PwC’s online tests via shared drives on company computers, as well as through emails.

According to CPAB, PwC failed to establish adequate policies and procedures to ensure the integrity of its testing. “In fact, on only one occasion between 2016 and early 2020 did the Firm formally advise its assurance personnel that they should perform training tests on their own,” CPAB stated. “During this time period, the Firm also employed certain monitoring procedures related to internal training, but those procedures were limited to tracking completion of courses and related tests. The monitoring procedures were not designed to detect other compliance issues, such as answer sharing.”

The slap-on-the-wrist character of the fines is due, at least in part, to the fact that PwC uncovered the cheating itself in 2020 and reported it to the regulatory bodies.

“CPAB takes into account the Firm's extraordinary cooperation in this matter, including self reporting, conducting an internal investigation, and remedial actions,” the regulator noted.

PwC’s remediation steps included “retraining, additional ethics training, financial penalties, written warnings and terminations where warranted,” according to Marcoux, who leads the firm’s 7,000 employees.

“While we are confident there has been no impact or compromise to the quality of our audits as evidenced by our current inspection results, we expect more from everybody in our firm,” Marcoux added.