In September 2021, the PCAOB issued a disciplinary order instituting disciplinary proceedings, making findings, and imposing sanctions in the case of Thomas P. Donovan, CPA. The order can be found in PCAOB Release No. 105–2021–015 at www.pcaobus.org.

a. Who is the PCAOB and what authority does it have to issue disciplinary orders and impose sanctions? 

b. What is the PCAOB’s source of potential violations of law or PCAOB rules? 

c. The order in the case of Donovan recognizes that PCAOB standards require that an auditor exercise due professional care, exercise professional skepticism, obtain sufficient appropriate evidence on which to base an opinion on the financial statements, and properly supervise engagement team members. Describe instances in which Donovan did not adhere to these requirements, resulting in low audit quality. 

d. What sanctions were imposed in this case? Do the sanctions seem appropriate?