1666 K Street NW

Washington, DC 20006

Office: 202-207-9100
Fax: 202-862-8430

www.pcaobus.org

Order Instituting Disciplinary Proceedings,

Making Findings, and Imposing Sanctions PCAOB Release No. 105-2023-005

In the Matter of Marcum LLP, June 21, 2023

Respondent.

By this Order Instituting Disciplinary Proceedings, Making Findings, and Imposing

Sanctions (“Order”), the Public Company Accounting Oversight Board (“Board” or “PCAOB”) is:

(1) censuring Marcum LLP (“Marcum,” “Firm,” or “Respondent”);

(2) imposing a civil money penalty in the amount of $3 million on the Firm;

(3) requiring Marcum to engage an independent consultant who will review and
make recommendations concerning Marcum’s quality control policies and procedures;

(4) requiring Marcum to implement all recommendations of the independent

consultant;

(5) requiring Marcum to make functional changes to its supervisory structure

related to the Firm’s quality control policies and procedures; and

(6) requiring Marcum to conduct certain training for all audit staff.

The Board is imposing these sanctions on the basis of its findings that the Firm violated
PCAOB rules and quality control standards by failing to take sufficient steps to ensure that its
system of quality control provided reasonable assurance that: (1) the Firm would comply with
the requirements regarding the acceptance of issuer clients and engagements, and (2) its
personnel would comply with applicable professional standards and regulatory requirements.
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PCAOB Release No. 105-2023-005
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I.
The Board deems it necessary and appropriate, for the protection of investors and to
further the public interest in the preparation of informative, accurate, and independent audit
reports, that disciplinary proceedings be, and hereby are, instituted against Respondent
pursuant to Section 105(c) of the Sarbanes-Oxley Act of 2002, as amended (the “Act”), and
PCAOB Rule 5200(a)(1).

II.
In anticipation of the institution of these proceedings, and pursuant to PCAOB
Rule 5205, Respondent has submitted an Offer of Settlement (the “Offer”) that the Board has
determined to accept. Solely for the purpose of these proceedings and any other proceeding
brought by or on behalf of the Board, or to which the Board is a party, and without admitting or
denying the findings herein, except as to the Board’s jurisdiction over Respondent and the
subject matter of these proceedings, which is admitted, Respondent consents to the entry of
this Order as set forth below.1

III.
On the basis of Respondent’s Offer, the Board finds that:2

A. Respondent
1. Marcum LLP is a limited liability partnership headquartered in New York, New
York. Marcum is licensed by the New York State Education Department (License No. 067839)
and several other states. Marcum is, and at all relevant times was, registered with the PCAOB,
pursuant to Section 102 of the Act and PCAOB rules.

1 The findings herein are made pursuant to Respondent’s Offer and are not binding on any other
person or entity in this or any other proceeding.
2 The Board finds that Respondent’s conduct described in this Order meets the conditions set out
in Section 105(c)(5) of the Act, 15 U.S.C. § 7215(c)(5), which provides that certain sanctions may be
imposed in the event of: (1) intentional or knowing conduct, including reckless conduct, that results in a
violation of the applicable statutory, regulatory, or professional standard; or (2) repeated instances of
negligent conduct, each resulting in a violation of the applicable statutory, regulatory, or professional
standard.

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B. Summary
2. This matter concerns the Firm’s failure to comply with PCAOB rules and quality
control standards during the time period starting in January 2020 through December 2021. The
Firm’s system of quality control failed to provide reasonable assurance that the Firm would:
(a) undertake only those issuer engagements that the Firm could reasonably expect to be
completed with professional competence and appropriately consider the risks associated with
providing professional services in the particular circumstances; (b) ensure that partner
workloads were manageable to allow sufficient time for engagement partners and engagement
quality review partners to discharge their responsibilities with professional competence and
due care; (c) timely assemble complete and final sets of audit documentation; (d) timely and
accurately file Form APs; (e) perform procedures to identify and assess the risks of material
misstatement at the assertion level with respect to special purpose acquisition company
(“SPAC”) audits; (f) ensure that personnel were consulting with individuals within or outside the
Firm, when appropriate, when dealing with complex issues; (g) perform sufficient procedures to
determine whether certain matters were critical audit matters (“CAMs”); and (h) make all
required communications to issuer audit committees.

C. Background
3. Between January 2020 through October 2021, Marcum accepted a substantial
number of audit clients, including hundreds of audits of SPACs, resulting in a significant increase
in its issuer audit practice. The Firm added 178 new SPAC audit clients in 2020, and another 617
new SPAC audit clients through October 2021.

4. During the period from January 2021 through April 2021, there was a
corresponding spike in issuer audit reports Marcum issued in comparison with the prior year.
From January 2020 through April 2020, the Firm issued 47 SPAC issuer audit reports and 87
non-SPAC issuer audit reports. In the corresponding period in 2021, those numbers increased to
399 SPAC issuer audit reports and 117 non-SPAC issuer audit reports—a 285% increase in issuer
audit reports. Overall, in 2021, Marcum issued 741 issuer audit reports, an increase of 513 (or
225%) over the 228 audit reports issued in 2020, as shown in the below chart.

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Marcum Issuer Audit Reports

350

300

250

200

150

100

50

0
Jan-20
Feb-20
Mar-20
Apr-20
May-20
Jun-20
Jul-20
Aug-20
Sep-20

Nov-20
Dec-20
Jan-21
Feb-21
Mar-21
Apr-21
May-21
Jun-21
Jul-21
Aug-21
Sep-21

Nov-21
Dec-21
Oct-20

Oct-21
Non-SPAC Issuer SPAC Issuer

5. Despite the significant increase in issuer clients, in Marcum’s New York City
office, its largest office, overall partner headcount increased from 13 to 16, or only 23%, from
January 2021 through June 2021. Although the Firm ultimately increased partner headcount
more significantly beginning in July 2021, the relatively small increase in partner headcount
from January 2021 through June 2021 resulted in large spikes in the number of hours worked
by each partner during this period. Partner utilization3 for the period from January 2021
through June 2021 for the New York City office increased by 27%, 36%, 41%, 49%, 39%, and
63% for each month respectively over the prior year. Partner utilization for the New York City
office reached a high in March 2021 of 146%.

6. The considerable increase in issuer clients also led to a large number of issuer
engagements being assigned to certain partners. During 2021, there were five engagement
partners and eight engagement quality reviewers who were each responsible for 30 or more
issuer clients. One engagement partner, Partner A, had 75 issuer clients, and one engagement
quality review partner, Partner B, had 118 issuer clients. This led to significant workloads for
these partners.

3 Utilization rate measures workload and productivity, and the rate is calculated by dividing client
billable hours worked in the period by the number of available work hours for the partners in the period
based on a forty-hour work week.

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7. During Marcum’s 2021 busy season, Partner A’s utilization from January through
March 2021 was 189%, 184%, and 204%, for each month, respectively. In fact, over that time
period, there were multiple weeks when Partner A worked approximately 100 hours over a
five-day (Monday – Friday) period. Similarly, Partner B had utilization numbers over the January
through March 2021 period of 117%, 161%, and 175% for each month, respectively.

8. Marcum also experienced staffing capacity issues below the partner level. For
example, utilization for Marcum’s senior managers and managers in the New York City office
during busy season from January 2021 to March 2021 was 112%, 148%, and 154%. Further, in
March 2021, Marcum did not have sufficient managers to staff all of its SPAC engagements. This
resulted in the engagement partner taking on the role of both engagement manager and
engagement partner for certain SPAC engagements.

D. The Firm Violated PCAOB Rules and Quality Control Standards

9. PCAOB rules require a registered public accounting firm and its associated
persons to comply with PCAOB quality control standards.4 These standards require that a
registered public accounting firm have a system of quality control for its accounting and
auditing practice.5 A firm’s system of quality control provides a critical foundation and
infrastructure for a firm’s audit quality as it should “ensure that services are competently
delivered and adequately supervised.”6 “A system of quality control is broadly defined as a
process to provide the firm with reasonable assurance that its personnel comply with
applicable professional standards and the firm’s standards of quality.”7

10. As described below, Marcum failed to establish policies and procedures

sufficient to provide reasonable assurance that its personnel complied with applicable
professional standards and regulatory requirements.

4 See PCAOB Rule 3100, Compliance with Auditing and Related Professional Practice Standards;
PCAOB Rule 3400T, Interim Quality Control Standards.
5 See Quality Control Standard 20.01, System of Quality Control for a CPA Firm’s Accounting and
Auditing Practice.
6 QC § 20.02.
7 QC § 20.03.

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i. Marcum’s System of Quality Control Failed to Provide Reasonable Assurance

with Respect to Acceptance of Issuer Clients and Partner Workload
11. PCAOB quality control standards require that a registered public accounting firm
establish quality control policies and procedures for deciding whether to accept or continue a
client relationship and whether to perform a specific engagement for that client.8 Such policies
and procedures should provide reasonable assurance that the firm undertakes only those
engagements that the firm can reasonably expect to be completed with professional
competence and appropriately considers the risks associated with providing professional
services in the particular circumstances.9 In addition, policies and procedures should be
established to provide the firm with reasonable assurance that work is assigned to personnel
having the degree of proficiency required under the circumstances.10

12. In accepting hundreds of new SPAC issuer clients, Marcum failed to properly
consider whether it could complete the new engagements with professional competence, given
the competing time demands on the Firm’s partners assigned to lead and execute the audits
and perform the engagement quality reviews for all of its issuer clients. In fact, during the
relevant time period, the Firm only rejected a new SPAC issuer client if the client acceptance
process identified an independence issue. Marcum also failed to timely implement sufficient
policies and procedures as to client acceptance to manage the large influx of new SPAC audit
clients.

13. The Firm was aware of the large increase in issuer clients, the demands on
partner and staff workloads, and the resulting impact it had on the Firm’s ability to comply with
certain PCAOB rules and standards, such as audit documentation requirements. Yet, Marcum
continued to accept new SPAC issuer clients without sufficiently addressing whether the Firm
could reasonably expect to complete these engagements with professional competence, given
the competing time demands on its partners assigned to lead audits and perform the
engagement quality reviews for its issuer clients, or appropriately considering the risks
associated with providing professional services in the circumstances.

14. The Firm, therefore, violated QC § 20 by failing to have adequate policies and
procedures related to: (a) client acceptance and continuance sufficient to provide reasonable
assurance that it undertook only those engagements that it could reasonably expect to be
completed with professional competence; (b) appropriately considering the risks associated

8 QC § 20.14.
9 QC § 20.15.
10 QC § 20.13.

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with providing professional services in particular circumstances; and (c) assigning work to
personnel having the requisite proficiency required in the circumstances. These failures
resulted in, or contributed to, the Firm’s acceptance of hundreds of new issuer audit clients
without appropriate processes in place for determining whether it had sufficient capacity to
accept such clients and ensuring that partner workloads were manageable so that engagement
partners and engagement quality reviewers could discharge their responsibilities with
professional competence.11

ii. Marcum’s System of Quality Control Failed to Provide Reasonable Assurance

with Respect to Assembly of Audit Documentation for Retention
15. A registered public accounting firm should establish quality control policies and
procedures to provide reasonable assurance that the firm complies with applicable professional
standards and regulatory requirements.12 AS 1215, Audit Documentation, establishes
requirements for documentation the auditor should prepare and retain in connection with
issuer engagements. Among other things, “[a] complete and final set of audit documentation
should be assembled for retention as of a date not more than 45 days after the report release
date (documentation completion date).”13

16. Throughout 2021, Marcum failed to timely assemble a complete and final set of
audit documentation within 45 days of the report release date in connection with hundreds of
issuer audit engagements, due to engagement teams’ heavy workloads caused by the increase
in issuer clients. Further, numerous audit documentation binders failed to include certain
required work papers and required signoffs.

17. For example, throughout 2020 and 2021, the Firm tracked, on a weekly basis by
office location, issuer audit engagements where a complete and final set of audit
documentation had not, to date, been assembled for retention. The Firm identified on this list
delinquent issuer audit engagements (i.e., audit engagements where a complete and final set of
work papers had not been assembled for retention and more than 45 days had passed since the
audit report had been released). For the Firm’s New York City office in the first half of 2020,
based on weekly tracking, delinquent issuer audit engagements were in the single digits.
However, after the significant increase in SPAC clients, the number of delinquent issuer audit
engagements identified by the Firm in the New York City office spiked dramatically during the

11 QC §§ 20.13-.15.
12 QC §§ 20.03, .17.
13 AS 1215.15.

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last week of January 2021, February 2021, and March 2021 from 40, to 107, to 459,
respectively, as shown in the below chart.

Delinquent Audit Documentation For Issuer Audit Engagements

in New York City Office (per Marcum Tracking)
500
450
400
350
300
250
200
150
100
50
0
Jul-20

Jul-21
Jan-20
Feb-20
Mar-20
Apr-20
May-20
Jun-20

Aug-20
Sep-20
Oct-20
Nov-20
Dec-20
Jan-21
Feb-21
Mar-21
Apr-21
May-21
Jun-21

Aug-21
Sep-21
Oct-21
Nov-21
Dec-21
18. During the peak delinquency period, Marcum reported hundreds of issuer audit
engagements with work papers more than one month past due, meaning that Marcum
continually failed to address most of the delinquent issuer audit engagements that had
appeared on the tracking report as delinquent in the prior month. For example, during the last
week of March 2021, April 2021, May 2021, and June 2021, Marcum reported 145, 293, 344,
and 269 delinquent issuer audit engagements more than one month past due, respectively. In
fact, as of June 30, 2021, Marcum reported 143 delinquent issuer audit engagements more
than three months past due, meaning these issuer audit engagements had been identified as
delinquent in March 2021 and had still not been addressed.

19. Despite being aware of the increasing number of audit engagements for which
the Firm had failed to assemble a complete and final set of audit documentation within 45 days
of the report release date, the Firm continued to accept new issuer clients and did not
sufficiently address the issue of its noncompliance with AS 1215.15.

20. As a result, the Firm violated QC § 20 by failing to have policies and procedures
related to audit documentation sufficient to provide it with reasonable assurance that it would
comply with the requirements of AS 1215.15.

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iii. Marcum’s System of Quality Control Failed to Provide Reasonable Assurance

with Respect to Auditor Reporting of Certain Audit Participants
21. A registered public accounting firm should establish quality control policies and
procedures to provide reasonable assurance that the work performed by engagement
personnel complies with applicable professional standards and regulatory requirements.14
PCAOB Rule 3211, Auditor Reporting of Certain Audit Participants, requires registered public
accounting firms to report information about engagement partners and other accounting firms
that participated in the audits of issuers by filing a Form AP for each audit report issued by the
firm for an issuer. Form APs must be filed by the 35th day after the date the audit report is first
included in a document filed with the U.S. Securities and Exchange Commission
(“Commission”),15 subject to a shorter filing deadline that applies when the audit report is first
included in a registration statement under the Securities Act filed with the Commission.16

22. Due to the enormous increase in issuer clients in late 2020 and early 2021, and
the expected increase in the number of audit reports that would be issued in that period,
Marcum’s policies and procedures related to Form AP were insufficient to manage the
increased volume of Form AP reporting obligations.

23. From January 1, 2021 through October 15, 2021, the Firm failed to timely file
Form APs with respect to 63 audit reports for 59 issuers and filed inaccurate Form APs with
respect to at least two issuer audits.

24. As a result, the Firm violated QC § 20 by failing to maintain effective policies and
procedures to provide it with reasonable assurance that it would comply with the requirements
of PCAOB Rule 3211.

iv. Marcum’s System of Quality Control Failed to Provide Reasonable Assurance

with Respect to Risk Assessment
25. A registered public accounting firm should establish quality control policies and
procedures to provide reasonable assurance that the firm complies with applicable professional
standards and regulatory requirements.17 AS 2110, Identifying and Assessing the Risks of

14 QC §§ 20.03, .17.
15 PCAOB Rule 3211(b)(1).
16 In that instance, a firm is required to file the Form AP by the tenth day after the date the audit
report is first included in a document filed with the Commission. PCAOB Rule 3211(b)(2).
17 QC §§ 20.03, .17.

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Material Misstatement, requires an auditor to “identify and assess the risks of material
misstatement at the financial statement level and the assertion level.”18

26. For each SPAC audit engagement, the engagement team included a chart in its
planning memorandum assessing risk by audit area and/or financial statement line item (e.g.,
cash, prepaid expenses), but not at the assertion level (e.g., valuation, existence). Standard
language in the planning memoranda stated: “We [or Marcum] assessed risk by audit area. We
[or Marcum] deemed no audit area to be of significant risk and therefore deemed it
appropriate to assess the inherent risk by audit area.”

27. In SPAC audits from January 2020 through approximately September 2021, the
Firm failed to perform risk assessment procedures to identify and assess the risks of material
misstatement at the assertion level.

28. As a result, the Firm violated QC § 20 by failing to establish policies and

procedures sufficient to provide it with reasonable assurance that the work performed by Firm
personnel with respect to assessing risks on SPAC audits met the requirements of AS 2110.59.

v. Marcum’s System of Quality Control Failed to Provide Reasonable Assurance

that Personnel Would Consult When Dealing with Complex Issues
29. A registered public accounting firm should establish quality control policies and
procedures to provide reasonable assurance that the firm complies with applicable professional
standards and regulatory requirements.19

30. A registered public accounting firm should also establish quality control policies
and procedures to provide reasonable assurance that personnel refer to authoritative literature
or other sources and consult, on a timely basis, with individuals within or outside the firm,
when appropriate (for example, when dealing with complex, unusual, or unfamiliar issues).20

31. During the relevant time period, 164 of Marcum’s SPAC and former SPAC audit
clients restated their financial statements for incorrect accounting related to the classification
of warrants in accordance with ASC Topic 815, Derivatives and Hedging, and the classification of
redeemable shares in accordance with ASC 480, Distinguishing Liabilities from Equity. Marcum’s

18 AS 2110.59.
19 QC §§ 20.03, .17.
20 QC § 20.19.

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engagement teams did not consult with individuals within or outside the Firm in connection
with the audits of most SPAC restatements.

32. As a result, the Firm violated QC § 20.

vi. Marcum’s System of Quality Control Failed to Provide Reasonable Assurance

with Respect to Determining Critical Audit Matters
33. A registered public accounting firm should establish quality control policies and
procedures to provide reasonable assurance that the firm would comply with applicable
professional standards and regulatory requirements.21 AS 3101, The Auditor’s Report on an
Audit of Financial Statements When the Auditor Expresses an Unqualified Opinion, “establishes
requirements regarding the content of the auditor’s written report when the auditor expresses
an unqualified opinion on the financial statements.”22 Among other things, “[t]he auditor must
determine whether there are any critical audit matters in the audit of the current period’s
financial statements.”23 A critical audit matter is “any matter arising from the audit of the
financial statements that was communicated or required to be communicated to the audit
committee and that: (1) relates to accounts or disclosures that are material to the financial
statements and (2) involved especially challenging, subjective, or complex auditor judgment.”24
The requirement to evaluate CAMs took effect for audits of large accelerated filers for fiscal
years ending on or after June 30, 2019, and on or after December 15, 2020, for all other
required companies.

34. In developing its audit programs for the evaluation of CAMs, Marcum failed to
develop sufficient guidance to reasonably assure that engagement teams properly evaluated
the complete population of potential CAMs. As a result, Marcum failed to properly evaluate in
certain issuer audits whether one or more matters were CAMs. Although such matters were
required to be communicated to audit committees under AS 1301, Communications with Audit
Committees, and related to accounts or disclosures that were material to the financial
statements, Marcum failed to properly evaluate whether the matters involved especially
challenging, subjective, or complex auditor judgment.

21 QC §§ 20.03, .17.
22 AS 3101.01.
23 AS 3101.11.
24 Id.

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35. As a result, Marcum violated QC § 20 by failing to establish policies and

procedures sufficient to provide it with reasonable assurance that it would comply with
AS 3101.11.

vii. Marcum’s System of Quality Control Failed to Provide Reasonable Assurance

with Respect to Audit Committee Communications
36. A registered public accounting firm should establish quality control policies and
procedures to provide reasonable assurance that the firm complies with applicable professional
standards and regulatory requirements.25 AS 1301 requires the auditor to communicate certain
matters related to the conduct of an audit to an issuer’s audit committee. These matters
include, among other things, the terms of the audit arrangement; the audit strategy; significant
and critical accounting policies and practices; critical accounting estimates; the names,
locations, and planned responsibilities of other independent public accounting firms or other
persons, who are not employed by the auditor, that perform audit procedures in the current
period audit; the auditor’s evaluation of the company’s ability to continue as a going concern;
and a schedule of any uncorrected misstatements related to accounts and disclosures that the
auditor presented to management.26

37. AS 1301 also requires the auditor to communicate to the audit committee
significant changes to the planned audit strategy or the significant risks initially identified and
the reasons for such changes.27

38. In several instances across multiple issuer audits in 2021, Marcum failed to make
certain required audit committee communications in accordance with AS 1301. In certain
audits, Marcum failed to communicate some or all of the issuer’s critical accounting policies
and practices and/or critical accounting estimates.28 For certain SPAC audits that had equity
restatements, Marcum elevated equity to a significant risk area in connection with the
restatement audit, but failed to communicate the change to the audit committee.29 In other

25 QC §§ 20.03, .17.
26 AS 1301.
27 AS 1301.11.
28 AS 1301.12.
29 AS 1301.11.

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audits, Marcum identified uncorrected misstatements during the audit, but failed to
communicate the misstatements to the audit committee.30

39. In addition, in audits where Marcum used a third-party firm to assist with audit
procedures, for example, in approximately 483 SPAC audits in 2021, Marcum failed to
communicate the names, locations, and planned responsibilities of the third-party firm to the
audit committee.31

40. As a result, Marcum violated QC § 20 by failing to establish policies and

procedures sufficient to provide it with reasonable assurance that it would comply with AS
1301.

IV.
In view of the foregoing, and to protect the interests of investors and further the public
interest in the preparation of informative, accurate, and independent audit reports, the Board
determines it appropriate to impose the sanctions agreed to in Respondent’s Offer. In ordering
sanctions, the Board took into consideration certain remedial steps Marcum has undertaken,
including revisions to certain quality control policies and procedures.

Accordingly, it is hereby ORDERED that:

A. Pursuant to Section 105(c)(4)(E) of the Act and PCAOB Rule 5300(a)(5), Marcum
is hereby censured.

B. Pursuant to Section 105(c)(4)(D) of the Act and PCAOB Rule 5300(a)(4), the
Board imposes a civil money penalty in the amount of $3 million on Marcum.

1. All funds collected by the PCAOB as a result of the assessment of this civil
money penalty will be used in accordance with Section 109(c)(2) of the
Act.

2. The Firm shall pay the civil money penalty within ten days of the issuance
of this Order by (a) wire transfer in accordance with instructions
furnished by PCAOB staff; or (b) United States Postal Service money
order, bank money order, certified check, or bank cashier’s check
(i) made payable to the Public Company Accounting Oversight Board,

30 AS 1301.18.
31 AS 1301.10(d).

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(ii) delivered to the Office of Finance, Public Company Accounting

Oversight Board, 1666 K Street, N.W., Washington D.C. 20006, and
(iii) submitted under a cover letter, which identifies the Firm as a
respondent in these proceedings, sets forth the title and PCAOB release
number of these proceedings, and states that payment is made pursuant
to this Order, a copy of which cover letter and money order or check shall
be sent to Office of the Secretary, Attention: Phoebe W. Brown,
Secretary, Public Company Accounting Oversight Board, 1666 K Street,
N.W., Washington, D.C. 20006.

3. If timely payment is not made, additional interest shall accrue at the

federal debt collection rate set for the current quarter pursuant to 31
U.S.C. § 3717. Payments shall be applied first to post-Order interest.

4. With respect to any civil money penalty amounts that Respondent shall
pay pursuant to this Order, Respondent shall not, directly or indirectly,
(a) seek or accept reimbursement or indemnification from any source
including, but not limited to, any current or former affiliated firm or
professional or any payment made pursuant to any insurance policy;
(b) claim, assert, or apply for a tax deduction or tax credit in connection
with any federal, state, local, or foreign tax; nor (c) seek or benefit by any
offset or reduction of any award of compensatory damages, by the
amount of any part of Respondent’s payment of the civil money penalty
pursuant to this Order, in any private action brought against Respondent
based on substantially the same facts as set out in the findings in this
Order.

5. Respondent understands that failure to pay the civil money penalty

described above may result in summary suspension of Respondent’s
registration, pursuant to PCAOB Rule 5304(a), following written notice to
Respondent at the address on file with the PCAOB at the time of the
issuance of this Order.

C. Pursuant to Sections 105(c)(4)(C) and 105(c)(4)(G) of the Act and PCAOB Rules
5300(a)(3) and (9), the Board orders Marcum to make functional changes to its
supervisory structure by requiring the Firm to create a new role and hire an
individual, not unacceptable to the PCAOB staff, to serve as head of the Firm’s
quality control system (“Chief Quality Officer”), who will, among other things, be
tasked with implementing and overseeing the Firm’s compliance with the

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independent consultant’s recommendations pursuant to this Order. Within

ninety (90) days after entry of this Order, Marcum shall submit to the PCAOB
staff a proposal setting forth the identity and qualifications of one or more
possible Chief Quality Officer candidates. Marcum may not hire as the Chief
Quality Officer any individual who has provided legal, auditing, or other services
to, or has had any affiliation with, Marcum during the two years prior to entry of
this Order. The Chief Quality Officer should have the experience, competence,
authority, and capacity to carry out the assigned responsibilities. The Chief
Quality Officer’s duties and responsibilities shall include supervising the design,
implementation, and operation of Marcum’s quality control system in
accordance with applicable professional and regulatory requirements and the
Firm’s policies and procedures. The PCAOB Staff shall have ten (10) business days
to communicate whether the Chief Quality Officer candidate(s) is/are not
unacceptable to the PCAOB Staff.
D. Pursuant to Sections 105(c)(4)(C) and 105(c)(4)(G) of the Act and PCAOB Rules
5300(a)(3) and (9), Marcum is required to incorporate in its governance structure
a committee responsible for the oversight function for the audit practice (the
“Audit Oversight Committee”) that includes at least one person who is not a
partner, shareholder, member, other principal, or employee of the Firm and who
does not otherwise have a commercial, familial, or other relationship with the
Firm that would interfere with the person’s exercise of independent judgment
with regard to matters related to the quality control system. The Chief Quality
Officer shall report to the Audit Oversight Committee.

E. Pursuant to Sections 105(c)(4)(C) and 105(c)(4)(G) of the Act and PCAOB Rule
5300(a)(3), (8):

1. Marcum shall retain, within sixty (60) days after the entry of this Order,
an independent consultant (“Independent Consultant”), not
unacceptable to the PCAOB Staff and Commission Staff in the Division of
Enforcement. Marcum shall provide the PCAOB Staff and Commission
Staff with notice of possible Independent Consultant candidates no later
than thirty (30) days following the entry of this Order. The PCAOB Staff
and Commission Staff shall have ten (10) business days to communicate
whether the Independent Consultant candidates are not unacceptable to
the PCAOB Staff and Commission Staff. Marcum shall, upon request by
the PCAOB Staff and Commission Staff, provide information about the
Independent Consultant’s work plan to the PCAOB Staff and Commission

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Staff including the Independent Consultant’s experience, ability to staff

the engagement, and expertise in auditing and audit firm quality controls.
Marcum shall provide to the PCAOB Staff and Commission Staff a copy of
the engagement letter detailing the scope of the Independent
Consultant’s responsibilities within three (3) months after the entry of
this Order. If requested by PCAOB Staff and Commission Staff, Marcum
shall make the Independent Consultant available to PCAOB Staff and
Commission Staff to make presentations, provide updates, and explain
the work, progress, and conclusions. The Independent Consultant’s
compensation and reasonable expenses shall be borne exclusively by
Marcum.

Independence

2. To ensure the independence of the Independent Consultant, Marcum

shall not have the authority to terminate the Independent Consultant or
substitute another independent consultant for the initial Independent
Consultant, without the prior written approval of the PCAOB Staff and
Commission Staff; and shall compensate the Independent Consultant and
persons engaged to assist the Independent Consultant for services
rendered pursuant to this Order at their reasonable and customary rates.

3. Marcum will require the Independent Consultant to enter into an

agreement that provides that, for the period of engagement and for a
period of two (2) years after the issuance of the Independent
Consultant’s final report (as defined in Paragraph IV.E.11), the
Independent Consultant shall not enter into any employment, consultant,
attorney-client, auditing, or other professional relationship with Marcum,
or any of its present or former affiliates, directors, officers, partners,
employees, or agents acting in their capacity as such. The agreement will
also provide that the Independent Consultant will require that any firm
with which he/she is affiliated or of which he/she is a member, and any
person engaged to assist the Independent Consultant in the performance
of his/her duties under this Order shall not, without prior written consent
of the PCAOB Staff and Commission Staff, enter into any employment,
consultant, attorney-client, auditing, or other professional relationship
with Marcum, or any of its present or former affiliates, directors, officers,
partners, employees, or agents acting in their capacity as such for the
period of the engagement and for a period of two (2) years after the

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issuance of the Independent Consultant’s final report (as defined by

Paragraph IV.E.11).

4. With respect to PCAOB Staff, Marcum will not assert any legal privilege
over communications with or work product prepared by the Independent
Consultant.

Scope of Independent Consultant’s Review

5. Within the time periods specified below, the Independent Consultant will
review and evaluate Marcum’s audit, review, and quality control policies
and procedures as to, among other aspects, their sufficiency, adequacy,
design, implementation, operation, and effectiveness, applicable to an
Audit of an Issuer, as that term is defined in PCAOB Rule 1001, regarding
the subjects set forth below. The Independent Consultant’s purpose for
this review and evaluation will be to make recommendations for
improvements to policies and procedures that:

a. Provide reasonable assurance that personnel comply with

applicable professional standards, regulatory requirements, and
the Firm’s standards of quality (see QC § 20.03, QC § 20.17, and
QC § 20.20) including:

i. That due professional care is exercised in the planning and

performance of the audit and the preparation of the
report. See AS 1015.

ii. That auditors are documenting the procedures performed,

evidence obtained, and conclusions reached with respect
to relevant financial statement assertions, and that audit
documentation contains sufficient information for an
experienced auditor, having no previous connection with
the engagement to (a) understand the nature, timing,
extent, and results of the procedures performed, evidence
obtained, and conclusions reached, and (b) determine who
performed the work and the date such work was
completed as well as the person who reviewed the work
and the date of such review. See AS 1215.06.

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iii. That audit documentation and other documents, including

emails that contain audit documentation, are being
retained for the length of time required by PCAOB
standards and Commission rules or SEC regulations, unless
a longer period of time is otherwise required by law. See
AS 1215.14.

iv. That prior to the audit report release date, the auditor
completed all necessary auditing procedures and obtained
sufficient evidence to support the representations in the
auditor’s report. See AS 1215.15.

v. That a complete and final set of audit documentation is

assembled for retention as of a date not more than 45
days after the report release date (“documentation
completion date”) and that documentation requirements
are also met for unfinished or incomplete engagements.
See AS 1215.15.

vi. That audit documentation is not deleted or discarded after

the documentation completion date and that any
information and documentation added after the
documentation completion date must indicate the date
the information was added, the name of the person who
prepared the additional documentation, and the reason
for adding it. See AS 1215.16.

vii. That the auditor is communicating to the audit committee

significant risks identified and any changes throughout the
course of the engagement. See AS 1301.09 and .11.

viii. That the auditor is communicating to the audit committee

the matters required to be communicated by AS 1301,
either orally or in writing, unless otherwise specified in AS
1301, and is documenting those communications in the
work papers, including whether such communications took
place orally or in writing. See AS 1301.25.

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ix. That all audit committee communications required by AS

1301 are made in a timely manner and prior to the
issuance of the auditor’s report. See AS 1301.26.

x. That the auditor is identifying and assessing the risks of

material misstatement at the financial statement level and
the assertion level. See AS 2110.59.

xi. That the auditor is identifying and assessing significant

risks consistent with AS 2110.69, 70, and .71.

xii. That the auditor performs and documents procedures to

determine whether matters which were communicated, or
required to be communicated, to the audit committee and
related to accounts or disclosures that were material to
the financial statements, were critical audit matters. See
AS 3101.11, 12, and 17.

xiii. That, with respect to each audit report that Marcum issues
for an issuer and that is included in a document filed with
the Commission, Marcum files a timely and accurate
report on Form AP in accordance with the instructions to
that form by the 35th day after the date the audit report is
first included in a document filed with the Commission or
in the case of a registration statement under the Securities
Act, 10 days after the date the audit report is first included
in a document filed with the Commission. See PCAOB Rule
3211.

b. Provide the Firm with reasonable assurance that the policies and
procedures established by the Firm for each of the elements of
quality control described in QC § 20 are suitably designed and are
being effectively applied, as applicable to the audit standards and
PCAOB rules cited in this Order. See QC §20.20.

c. Provide the Firm with reasonable assurance that work is assigned

to personnel having the degree of technical training and
proficiency required in the circumstances and that personnel
participate in general and industry-specific continuing
professional education and other professional development

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activities that enable them to fulfill responsibilities assigned. See

QC §§ 20.13(b) and (c).

d. Provide the Firm with reasonable assurance that the likelihood of

association with a client whose management lacks integrity is
minimized. See QC § 20.14.

e. Provide the Firm with reasonable assurance that the Firm

undertakes only those engagements that the Firm can reasonably
expect to be completed with professional competence, including,
but not limited to, policies and procedures related to the client
acceptance process and staffing capacity as related to client
acceptance. See QC §§ 20.15(a) and (b).

f. Provide the Firm with reasonable assurance that personnel refer

to authoritative literature or other sources and consult, on a
timely basis, with individuals within or outside the Firm, when
appropriate and that the individuals consulted should have
appropriate levels of knowledge, competence, judgment, and
authority. See QC § 20.19.

g. Provide the Firm with reasonable assurance that quality control

policies and procedures are being communicated to personnel
and that they are understood and complied with, and that the
Firm has established a means of communicating its established
quality control policies and procedures, and the changes thereto,
to appropriate personnel on a timely basis. See QC § 20.23.

6. Marcum shall cooperate fully with the Independent Consultant and shall
provide reasonable and timely access to any Firm personnel, information,
and records (including audit and consultation documents) as the
Independent Consultant may reasonably request for the Independent
Consultant’s review and evaluation described in Paragraph IV.E.5 and the
reports specified in Paragraphs IV.E.7 through IV.E.13 below.

Independent Consultant Reports and Certifications

7. Within eight (8) months after the entry of this Order, Marcum shall
require the Independent Consultant to issue a detailed written report
(“Initial Report”) to Marcum: (i) summarizing the Independent

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Consultant’s review and evaluation of the areas identified in Paragraph

IV.E.5 and its subsections above; and (ii) making recommendations,
where appropriate, reasonably designed to ensure that audits conducted
by Marcum comply with PCAOB standards and rules and any applicable
federal securities laws. Marcum shall require the Independent Consultant
to provide a copy of the Initial Report to the PCAOB Staff and Commission
Staff when the Initial Report is issued. Marcum shall also make the
Independent Consultant available to PCAOB Staff and Commission Staff
to discuss its work both periodically and after issuance of the report.

8. Marcum will adopt and implement, as soon as practicably possible, but in

any event no later than two (2) years after the entry of this Order, and in
compliance with the requirements set forth in Paragraphs IV.E.9-15
below, all recommendations of the Independent Consultant in the Initial
Report. However, within thirty (30) days of issuance of the Initial Report,
Marcum may advise the Independent Consultant in writing of any
recommendation that it considers to be unnecessary, unjust, outside the
scope of this Order, unduly burdensome, or impractical. Marcum need
not adopt any such unnecessary, unjust, outside the scope of this Order,
unduly burdensome, or impractical recommendation at that time, but
instead may propose in writing to the Independent Consultant an
alternative recommendation (an “Alternative Recommendation”)
designed to achieve the same objective or purpose. Marcum will provide
any such Alternative Recommendation(s) to the PCAOB Staff and
Commission Staff at the same time that Marcum submits such Alternative
Recommendation(s) to the Independent Consultant. Marcum and the
Independent Consultant shall engage in good faith negotiations in an
effort to reach agreement on any recommendations objected to by
Marcum.

9. In the event that the Independent Consultant and Marcum are unable to
agree on any Alternative Recommendation(s) within sixty (60) days of the
issuance of the Initial Report, Marcum shall abide by the determinations
of the Independent Consultant.

10. Within sixty (60) days of issuance of the Initial Report, Marcum will certify
to the PCAOB Staff and Commission Staff in writing that (i) Marcum has
adopted and has implemented or will implement all recommendations of
the Independent Consultant; and (ii) the Independent Consultant agrees

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that Marcum has adopted, implemented, and/or has a plan for

implementation (the “Certification of Agreement to Adopt
Recommendations”). Marcum will provide a copy of the Certification of
Agreement to Adopt Recommendations to the PCAOB Staff and
Commission Staff. To the extent that Marcum has not implemented all
recommendations contained in the Initial Report by that time, Marcum
will certify to the PCAOB Staff and Commission Staff in writing, no later
than thirty (30) days after their implementation, that (i) Marcum has
adopted and has implemented all recommendations contained in the
Initial Report; and (ii) the Independent Consultant agrees that the
recommendations have been adequately adopted and implemented by
Marcum (“Implementation Certification”).

11. Within six (6) months of the issuance of the Initial Report or the
Implementation Certification, whichever is later, Marcum shall require
the Independent Consultant to complete testing to assess (i) whether
Marcum has implemented the written policies and procedures
concerning the areas specified in Paragraph IV.E.5 and its subsections
above and (ii) the effectiveness of the design and implementation of
those policies and procedures. At least thirty (30) days prior to beginning
the testing, Marcum shall provide to the PCAOB Staff and Commission
Staff a copy of the scope and parameters for testing. The PCAOB Staff and
Commission Staff shall have ten (10) days to provide comments. Within
thirty (30) days of the completion of this testing, Marcum shall require
the Independent Consultant to issue a written report summarizing the
results of the Independent Consultant’s testing and assessment, and if
applicable, any recommendations (“Final Report”) and to provide a copy
of the Final Report to the PCAOB Staff and Commission Staff. At this time,
if the Independent Consultant determines that Marcum has adopted and
implemented all recommendations set forth in the Initial Report and that
Marcum’s quality control policies addressing those recommendations
and the policies specified in paragraph IV.E.5 and its subsections are
functioning effectively, Marcum shall require the Independent Consultant
to certify in writing that Marcum has satisfied such undertakings
(“Independent Consultant Certification”) and provide a copy of this
certification to the PCAOB Staff and Commission Staff. In all events,
Marcum must complete all undertakings concerning the implementation
of the recommendations set forth in the Independent Consultant’s Initial
Report, and any amended recommendations, and provide the

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Independent Consultant Certification to the PCAOB Staff and Commission

Staff no later than two (2) years after the entry of this Order.

12. To the extent that the Final Report has additional recommendations that
Marcum has not implemented, within thirty (30) days of issuance of the
Final Report, Marcum will certify to the PCAOB Staff and Commission
Staff in writing that it has adopted and has implemented or will
implement all additional recommendations of the Independent
Consultant (“Final Certification of Agreement to Adopt
Recommendations”). Marcum will provide a copy of the Final
Certification of Agreement to Adopt Recommendations to the PCAOB
Staff and Commission Staff. To the extent that Marcum has not
implemented all additional recommendations contained in the Final
Report by that time, Marcum will certify to the PCAOB Staff and
Commission Staff in writing, by thirty (30) days after their
implementation, that Marcum has adopted and has implemented all
recommendations contained in the Final Report (“Final Implementation
Certification”). In all events, Marcum must complete all undertakings
concerning the implementation of the recommendations set forth in the
Independent Consultant’s Final Report no later than four (4) months after
the issuance of the Final Report.

13. The Initial Report, Final Report, Certification of Agreement to Adopt

Recommendations, Implementation Certification, Independent
Consultant Certification, Final Certification of Agreement to Adopt
Recommendations, and Final Implementation Certification, and any
related correspondence or other documents shall be submitted to the
Director of the PCAOB’s Division of Enforcement and Investigations, 1666
K Street, N.W., Washington, DC, 20006, with a copy to Laura B. Josephs,
Assistant Director, Division of Enforcement, Securities and Exchange
Commission, 100 F Street, N.E., Washington, DC, 20549.

14. The Initial Report and Final Report by the Independent Consultant will
likely include confidential financial, proprietary, competitive business or
commercial information. Public disclosure of these reports could
discourage cooperation, impede pending or potential government
investigations, or undermine the objectives of the reporting requirement.
For these reasons, among others, these reports and the contents thereof
are intended to remain and shall remain non-public, except (1) pursuant

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to court order, (2) as agreed to by the parties in writing, (3) to the extent
that the PCAOB determines in its sole discretion that disclosure would be
in furtherance of the PCAOB’s discharge of its duties and responsibilities
and in compliance with Section 105(b)(5) of the Act, or (4) if such
disclosure is otherwise required by law.

15. No later than sixty (60) days from the date that Marcum signs the Final
Implementation Certification, Marcum’s CEO and Marcum’s Chief Quality
Officer shall both certify, in writing, compliance with the undertakings set
forth above. The certification shall identify the undertakings, provide
written evidence of compliance in the form of a narrative, and be
supported by exhibits sufficient to demonstrate compliance. The PCAOB
Staff and Commission Staff may make reasonable requests for further
evidence of compliance, and Marcum agrees to provide such evidence.
This certification and supporting material shall be submitted to the
Director of the PCAOB’s Division of Enforcement and Investigations, 1666
K Street, N.W., Washington, DC, 20006, with a copy to Laura B. Josephs,
Assistant Director, Division of Enforcement, Securities and Exchange
Commission, 100 F Street, N.E., Washington, DC, 20549, no later than
sixty (60) days from the date of the completion of the undertakings.

16. For good cause shown, and solely at the discretion of the PCAOB Staff
and Commission Staff, the PCAOB Staff and Commission Staff may extend
any of the procedural dates relating to the undertakings. Deadlines for
procedural dates shall be counted in calendar days, except that if the last
day falls on a weekend or federal holiday, the next business day shall be
considered to be the last day.

17. If the PCAOB Staff believes that Marcum has not satisfied these
undertakings, the PCAOB Staff may petition the Board to reopen the
matter to determine whether additional sanctions are appropriate.

F. Pursuant to Section 105(c)(4)(F), (G) of the Act and PCAOB Rule 5300(a)(6), (9),
Marcum is required:

1. As of the date of the Final Implementation Certification, to have

conducted training related to changes to the Firm’s policies and
procedures that resulted from the Independent Consultant’s Initial
Report and Final Report in, among other areas:

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a. Audit Documentation;

b. PCAOB reporting requirements (including Forms AP);

c. Risk Assessments;

d. Critical Audit Matters; and

e. Audit Committee Communications.

G. The Firm understands that the failure to satisfy these conditions may constitute
a violation of PCAOB Rule 5000 that could provide a basis for the imposition of
additional sanctions in a subsequent disciplinary proceeding.

ISSUED BY THE BOARD.

/s/ Phoebe W. Brown

________________________
Phoebe W. Brown
Secretary

June 21, 2023

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