The Public Company Accounting Oversight Board (PCAOB) has fined the Netherlands member firms of Deloitte, PwC, and EY a total of $8.5m (€7.2m) for cheating in internal exams.

The audit watchdog issued separate settled disciplinary orders against these firms for breaching its rules and quality control standards related to their internal training programmes and monitoring systems.

Over a five-year period from 2018 to 2022, the PCAOB found that all three firms failed to adequately prevent or detect widespread improper answer sharing on mandatory training tests designed to enhance the competencies and professional integrity of their staff.

The misconduct involved “hundreds” of professionals, including partners, who either provided or received access to test questions or answers without reporting it.

At Deloitte Netherlands and PwC Netherlands, the improper conduct extended to senior leadership.

The answer sharing occurred through various methods and was linked to tests for training on topics such as professional independence, PCAOB audit requirements, and professional integrity.

Parallel investigations by the PCAOB and the Dutch Authority for the Financial Markets (AFM) led to the AFM imposing intensive supervision measures to prevent future occurrences.

Each firm consented to the PCAOB’s orders without admitting or denying the findings.

Deloitte Netherlands and PwC Netherlands each agreed to a $3m civil money penalty, while EY Netherlands agreed to a $2.5m penalty.

All three firms were censured and committed to reviewing and improving their quality control policies to ensure personnel act with integrity in internal training, with compliance to be reported to the PCAOB.

The regulator noted that the firms’ substantial cooperation during the investigations, including meaningful remedial actions and participation in the AFM’s supervision process, resulted in reduced penalties.

Without this cooperation, the fines would have been significantly higher, and additional sanctions may have been imposed, stated the watchdog.

PCAOB chair Erica Willliams said: “The PCAOB will not allow impaired ethics to threaten the integrity of our capital markets.

“I thank the Dutch Authority for the Financial Markets for its cooperation in the investigations of these matters and applaud the intensive supervision measures it has taken to hold these firms accountable going forward.”

In 2024, the PCAOB fined KPMG Netherlands $25m for exam cheating over a five-year period.

"PCAOB fines Dutch units of Deloitte, PwC, EY for exam misconduct" was originally created and published by The Accountant, a GlobalData owned brand.