US audit watchdog the Public Company Accounting Oversight Board (PCAOB) has fined Deloitte & Touche $2m (£1.2m) to settle civil charges that the US firm allowed a former partner to continue working in its public company audit practice while he was subject to a suspension order.

The PCAOB said Deloitte had violated both the Sarbanes-Oxley Act and PCAOB rules, and ordered the firm to undertake certain remedial actions to ensure that similar violations do not occur in the future. The $2m penalty equals the PCAOB's single largest civil money penalty, which was imposed in another disciplinary matter.

In 2008, the PCAOB took disciplinary action against the individual auditor, Christopher Anderson, in relation to his actions when responsible for the 2003 financial statements of Navistar Financial Corporation (NFC), which included approximately $19.7m (£12m) in apparent errors resulting in an overstatement of NFC's assets, revenues, and earnings.

Anderson settled the case and agreed to pay a $25,000 (£15,500) fine and accept a one-year suspension from the industry. The PCAOB said that following this ruling, Deloitte allowed the partner to carry out work which included developing firm-wide policies and audit guidance, as well as participation in consultations with public company audit engagement teams.