An Alameda, Calif.-based CPA and his firm have been barred from practice before the SEC.Kan, who founded his firm in 2003, can reapply for admission to practice after three years. Kan is now a partner in Huang Kan & Co., Foster City, Calif., age 35, founded his firm in 2003. He can reapply for admission to practice after three years.
According to the SEC's findings, the "vast majority of Kan & Co.'s relevant audit work was performed by a staff member who had no auditing experience at the time he started his employment with Kan in June of 2009." Kan was held to have failed to adequately supervise the staff member, which resulted in many of the reported problems.
Among problems cited was that for one client, Kan performed the engagement quality review for the fiscal 2011 statements, even though he was engagement partner for the same company for its 2009 and 2010 reports. Because of the earlier work, he is prohibited from performing the engagement quality review for the same client.
In another case, the audit for a clients' 2011 reports was completed on April 16, 2012 with the Form 10- filed on April 17. However the engagement quality review was not completed until April 18, after the report had been filed. The same problem occurred with another client's 2010 financial report.
Kan's work papers for the following five engagements for three of the clients were also held not to be have been adequately documented. For two clients, Kan and his firm failed to obtain written representations from management in connection with three quarterly reviews: