Global audit firm Deloitte has come under scrutiny for failing to meet audit standard violations in several countries. Recently, the National Financial Reporting Authority (NFRA) in India fined Deloitte about Rs 2 crore for alleged lapses in auditing Zee Entertainment Enterprises Ltd (ZEEL).
This penalty adds to a growing list of fines imposed on Deloitte by various countries over the past five years. The firm has faced criticism for not adhering to professional standards and quality control in its audits.
India’s Action Against Deloitte
The NFRA’s penalty on Deloitte highlights issues in the audit of ZEEL. Indian regulators accused the firm of lapses in ensuring the accuracy and reliability of the company’s financial records. The fine underscores the importance of accountability in auditing practices.
US Imposes Heavy Penalties
Deloitte’s operations in the United States have also faced penalties. In September 2022, the US Securities and Exchange Commission (SEC) fined Deloitte’s Chinese affiliate $20 million. The penalty was imposed for allowing clients to perform their audit work, which directly violated audit standards.
China’s Stringent Actions
China has taken significant steps to address Deloitte’s shortcomings. In March 2023, Chinese regulators fined Deloitte 211.9 million yuan ($30.8 million) for flaws in auditing China Huarong Asset Management Company. Authorities criticized the firm for failing to maintain the quality expected of an international audit firm.
Penalties in Canada and South America
Deloitte has faced regulatory actions in other regions as well. In Canada’s Ontario Province, the firm was fined $1.5 million in 2024 for not following professional conduct rules. Canadian regulators pointed out that Deloitte failed to meet necessary auditing guidelines.
In Colombia, Deloitte & Touche S.A.S. was fined $900,000 in September 2023 by the Public Company Accounting Oversight Board (PCAOB) for violating quality control measures.
Deloitte affiliates in Southeast Asia have also been penalized. In April 2024, the PCAOB imposed fines of $1 million each on Deloitte’s affiliates in Indonesia and the Philippines. The penalties were related to exam cheating and violations of auditing standards. These incidents raised serious concerns about the firm’s adherence to professional conduct.
Deloitte Audit Violations
These repeated fines across multiple countries have raised questions about Deloitte’s ability to apply consistent standards across its global network. As one of the Big Four audit firms, Deloitte operates under complex regulatory frameworks in various countries. Ensuring compliance with local and international standards remains an ongoing challenge.
Deloitte’s repeated violations and penalties highlight the need for stricter internal controls and quality assurance measures within the firm. While the company plays a critical role in auditing and financial reporting worldwide, these incidents have tarnished its reputation. As global regulators continue to monitor audit firms, Deloitte must take significant steps to restore trust and ensure compliance with professional standards.
