The U.S. Public Company Accounting Oversight Board (PCAOB) fined Deloitte Netherlands, PwC Netherlands, and EY Netherlands for enabling a culture where professionals—right up to senior leaders—shared answers on internal training exams. These tests were intended to ensure employees were meeting professional standards, but instead, hundreds engaged in misconduct between 2018 and 2022.
The violations weren’t minor. PCAOB said all three firms failed to “adequately prevent” or “detect” the widespread answer sharing. The misconduct reflected serious gaps in internal quality control and ethics oversight.
The Penalties and Their Implications
Deloitte and PwC each agreed to pay $3 million, while EY paid $2.5 million. None of the firms admitted or denied the wrongdoing but accepted the PCAOB’s orders. The penalties are civil monetary sanctions—meant to punish and reform rather than criminally prosecute.
More importantly, the firms were formally censured and ordered to revamp their quality control programs. They must now report on their compliance and work toward improving internal integrity, particularly in their employee training frameworks.
How Deep the Cheating Went
The PCAOB investigation revealed that the cheating was not isolated to a few rogue employees. Instead, it spread across levels—including partners and team leads. The failure of internal controls allowed the practice to fester even after the firms became aware that similar cheating had occurred at another major audit firm.
According to Robert Rice, PCAOB’s enforcement chief, “Their systems failed to evaluate risks of misconduct and did not adapt even when industry-wide red flags were visible.” The firms did cooperate with the investigation, which somewhat mitigated the consequences.
Industry’s Integrity in Question
This is not an isolated event. Just last year, the PCAOB fined the Dutch arm of KPMG and its top assurance executive $25 million for a similar case of cheating. With three of the Big Four now implicated in training-related scandals, questions about ethical oversight in global auditing firms are growing louder.
PCAOB Chair Erica Williams emphasized, “We will not allow impaired ethics to threaten the integrity of our capital markets.” The regulator’s crackdown sends a signal that even industry giants will be held accountable.