PCAOB Fines Marcum Asia $100,000 for Not Communicating Properly with Successor Audit Firm
September 24, 2025
New York City-based Marcum Asia CPAs LLP settled charges with the Public Company Accounting Oversight Board on Sept. 23 over charges that it broke U.S. audit rules on communicating with a successor auditor.
As part of the settlement, Marcum Asia CPAs agreed to a censure, pay a $100,000 fine, and to conduct training on communications between predecessor and successor auditors.
PCAOB standards provide guidance on communications between predecessor and successor auditors when a change of auditors is in process or has taken place. The predecessor auditor should determine which workpapers are to be made available for review by the successor auditor and which may be copied.
In this case, Marcum Asia, which was known as Marcum Bernstein & Pinchuk at the time, violated PCAOB rules and auditing standards in connection with its transfer of draft workpapers to China-based Shandong Haoxin CPAs Co. Ltd., which succeeded Marcum Asia as the auditor of Beijing-based Gridsum Holding Inc.
Gridsum, a data analysis software company, engaged Marcum Asia in June 2018 to audit its fiscal year 2015-2017 financial statements. Before Marcum Asia completed those audits, Gridsum dismissed the firm and retained Haoxin as its auditor.
Shortly before Gridsum dismissed Marcum Asia, as part of an anticipated transition of the audits to Haoxin, Marcum Asia transferred its draft workpapers to the successor firm. However, Marcum Asia failed to reach an understanding with Haoxin as to the use of the draft workpapers, in violation of AS 2610, Initial Audits—Communications Between Predecessor and Successor Auditors.
The disciplinary order states:
MarcumBP [now Marcum Asia] never communicated directly with anyone employed at Haoxin about the extent, if any, to which Haoxin could use the work reflected in MarcumBP’s draft work papers. Instead, MarcumBP only orally discussed the use of the draft work papers with a third-party intermediary, who came to understand and communicated to Haoxin that there were no restrictions on Haoxin’s use of MarcumBP’s work papers.
After receiving the draft workpapers, Haoxin improperly used them in its audits and issued an unqualified audit report on Gridsum’s 2015-2017 financial statements.
The PCAOB order stated:
Then, nine days after Haoxin issued that audit report, MarcumBP sent a draft letter agreement for Haoxin to sign, asserting that the draft work papers had been provided to Haoxin solely to assist Haoxin in planning the audit. The letter sought a signature from Haoxin to indicate its agreement with the letter, but Haoxin did not agree with MarcumBP’s views expressed in the letter and did not sign it.
This resulted in a separate 2023 PCAOB enforcement settlement in which Haoxin was fined $750,000 and two of the firm’s partners and two directors fined a total of $190,000.
[CPA Practice Advisor]
