Tag: Auditors

SEC Institutes Settled Order as to Audit Engagement Partner for Failures Related to Audit of FTX

The Securities and Exchange Commission (“SEC”) today announced settled charges against Francis Decker, a CPA who acted as the lead engagement partner at Prager Metis CPAs, LLC on its audits of the now-defunct crypto asset trading platform FTX, relating to Decker’s conduct during the FTX audits. The SEC had previously settled charges with Prager Metis in connection with its FTX audits.

According to the SEC’s order, beginning in February 2021, Decker led a Prager Metis team in conducting audits of the financial statements of FTX. The SEC’s order finds that the audits were not conducted in accordance with Generally Accepted Accounting Standards (GAAS) and that Decker’s negligent conduct during those audits resulted in a violation of those applicable professional standards. Specifically, the SEC’s order finds that the foundational failure to meet GAAS stemmed from the fact that Decker did not have a sufficient understanding of FTX, or the crypto asset markets in which it operated and the engagement team that Decker assembled collectively lacked the competence, experience, and knowledge to appropriately conduct the audits.

Source: SEC Institutes Settled Order as to Audit Engagement Partner for Failures Related to Audit of FTX

The Dirty Job That Accountants Desperately Wish AI Would Take Over – WSJ

Matt Gardiner recently climbed a series of 90-foot grain bins to measure millions of bushels of corn.

He and his team got so covered in thick dust that they had to be sprayed down with air hoses before returning to their cars. It’s one of the hazards of the job, along with fertilizer-soaked boots, ripped pants from ladder cages, and encounters with pigeons, mice and sleeping bats.

Gardiner isn’t a farmer. He’s an accountant.

The third-generation Iowa-based auditor has to review and verify the financials compiled by his clients, largely agricultural businesses. He uses a laser to measure grain, but there’s no tool inside the bins that can save him from having to climb.

“There’s so much dust in the process of getting grain into a bin that it would have to have a little windshield wiper on the sensors to constantly clear it,” Gardiner said. “I think that’d be great.”

Accounting firms and their clients are increasingly using artificial intelligence and drones to do work long handled by humans. But so far, there’s been no technological solution to what is often the dirtiest part of an audit: counting inventory. That means the messy, bizarre field trips remain a rite of passage for young professionals in an otherwise deskbound field.

Source: The Dirty Job That Accountants Desperately Wish AI Would Take Over – WSJ

If US regulators won’t hold auditors to account, will the courts?

Investor advocates have been dismayed by the Trump administration’s approach to regulation of auditing firms. It has slashed the budget of the Public Company Accounting Oversight Board, the main regulatory body, and installed a career auditor at its helm, prompting some to claim that foxes are now guarding the hen house. The Securities and Exchange Commission, which oversees the PCAOB,…

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Private Equity’s Ties to Companies’ Auditors Have Never Been Closer. That Worries Some Regulators. – WSJ

By the end of 2025, more than half of the largest 30 U.S. accounting firms will have either sold an ownership stake or part of their business to private-equity investors, up from zero in 2020, said Allan Koltin, chief executive at advisory firm Koltin Consulting Group. An auditor’s objectivity, both real and perceived, is critical to the business of accounting…

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SEC Charges Olayinka Oyebola and His Accounting Firm With Aiding and Abetting Massive Fraud

The Securities and Exchange Commission today charged Olayinka Oyebola and his Public Company Accounting Oversight Board-registered accounting firm, Olayinka Oyebola & Co. (Chartered Accountants), with aiding and abetting a massive securities fraud perpetrated by Mmobuosi Odogwu Banye, also known as Dozy Mmobuosi, and three related U.S. companies that Mmobuosi controlled (the Tingo entities). The SEC recently obtained a $250 million…

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Audit Firm Prager Metis Settles SEC Charges for Negligence in FTX Audits and for Violating Auditor Independence Requirements

The Securities and Exchange Commission today announced that Prager Metis CPAs, LLC (Prager) and its California professional services firm, Prager Metis CPAs LLP, (collectively, the Prager Entities) agreed to pay $1.95 million to resolve two actions alleging misconduct in its audits of the now-defunct crypto asset trading platform, FTX, and auditor independence violations. In one of the actions, the SEC…

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SEC Charges Former Chairman and CEO of Tech Co. Kubient With Fraud and Lying to Auditors

The Securities and Exchange Commission today filed charges against Paul D. Roberts, the former Chair, CEO, and president of Kubient Inc.; Joshua A. Weiss, the company’s former chief financial officer; and Grainne M. Coen, the company’s former audit committee chair, for their roles in a scheme in which Kubient overstated and misrepresented its revenue in connection with two public stock…

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Enforcement Activity Involving Auditors – 2024 Mid-Year Update

In January 2024, we issued the report “2023 Enforcement Activity Involving Auditors,” in which we analyzed enforcement activity brought against auditors by the US Securities and Exchange Commission (SEC) and the Public Company Accounting Oversight Board (PCAOB) during 2018– 2023. Our analysis featured enforcement trends and a comparison of activity under the SEC’s and PCAOB’s current leadership to activity under…

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