Following what the Public Company Accounting Oversight Board is calling its first finding of quality control violations at a domestic, global network accounting firm, the PCAOB and Grant Thornton reached a settlement fining GT $1.5 million and requiring the firm to fix certain auditing problems.

In a disciplinary order issued Tuesday, the board charged that from 2013 to 2014, GT violated PCAOB rules, quality control standards, and auditing standards in two audits of financial services clients conducted out of its Philadelphia office.

GT also broke PCAOB rules and violated auditing standards in connection with its audit of The Bancorp Inc.’s December 31, 2013, financial statements and internal controls over financial reporting, the board alleged.

The firm “violated PCAOB quality control standards by assigning two partners from its Philadelphia office, with known audit quality concerns, to serve as engagement partners on two separate fiscal year-end 2013 issuer audits, without providing them sufficient support or monitoring,” according to the board’s disciplinary order.

Before the Philadelphia office’s year-end 2013 audits, GT “had significant concerns with the proficiency and technical competence of two engagement partners” in the office’s financial services group, according to the order. Among the concerns was “an overly burdensome workload” shouldered by David M. Burns, the engagement partner on the 2013 Bancorp audit.

Other concerns moved GT to place the other partner, who is unnamed in the PCAOB order, on a “performance improvement plan.” The firm also developed “other remedial plans to address audit quality issues within the office,” the board said.

“Despite those concerns, Grant Thornton failed to take sufficient steps to properly support or monitor” the two partners when it assigned them to each serve as an engagement partner on two separate 2013 issuer audits for financial services clients, according to the PCAOB.

Grant Thornton knew that the two partners “had failed to appropriately perform certain issuer audits in prior years,” the board added.

Among the actions GT agreed to take was to assign a member of the firm’s national practice “to conduct a pre-issuance quality control monitoring review of the audit work for each issuer audit for a financial services client” audited by the Philadelphia office for a year.

In an email, GT said that “[the] matter is related to two audit engagements from fiscal-year-end 2013 and, as indicated in the order, Grant Thornton LLP has made efforts since then to address the issues connected with this settlement. We appreciate the work done by the PCAOB, and are pleased to have this matter resolved.”

The PCAOB also sanctioned Burns, now a former Grant Thornton partner, for his violations of PCAOB auditing standards in his work in the 2013 Bancorp audit. Burns was fined $15,000 and barred from associating with a PCAOB-registered accounting firm, with the right to petition to remove the bar after one year.

Neither GT nor Burns admitted or denied the PCAOB’s findings.

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