The two were also ordered to pay disgorgement of $128,000 and prejudgment interest of $10,954. Bryce Walker, now 36, was the engagement partner, Spence, 38 the quality review partner, for Subaye. Both are residents of Markham, Ontario, and are partners at Kreston GTA.

Subaye pictured itself as "a leading online business services provider in China", claiming to sell video advertising, entertainment media services, and cloud computing services. Sales agents supposedly collected monthly cash fees. The company reported revenue of about $39 million for the year ended Sept. 30, 2010, and more than 1,500 employees and 14,600 customers.

Its undoing came when it hired PricewaterhouseCoopers Hong Kong, exposing Subaye "as a fraud without infrastructure, few if any paying customers or employees no real revenue and no cash in bank accounts," according to SEC documents

Subaye hid its situation buy claiming it invested $22.1 million of revenue into marketing expenses, which the SEC said was done to disguise the lack of sales. Also in the fourth quarter of 2010, Subaye recorded an $18.8 million asset called "Cash Held in Trust" on its balance sheet.

However, when the accounting firm asked for documents to support the existence of this cash, said to be held by sales agents for development. Subaye's management could not produce any bank account statements or receipts. For its financial report ended, Sept. 30, 2009, Subaye reported $8.1 million in Deposits for Purchases of Inventoriable Assets. That amount was reduced to $2.8 million in write offs that was as a way to hide the lack of real accounts receivable.

The SEC said Subaye should not have recorded $21 million in sales. Besides reported phony revenue, the company had also, falsified marketing expenses, overstated the number of employees, and failed to disclose material related party transactions. No one from DNTW ever traveled to Subaye's offices in China, but instead relied on Chinese assistants for audit fieldwork. However, during the 2010 audit, Bryce Walker did not know the procedures performed by the assistants.

The two found there was not sufficient evidence to account for the $18.8 million as an asset, and insisted it be booked as a marketing expense. But the Walkers did not obtain evidence to verify the cash existed or what its purpose was. There was also not sufficient document so show how accounts receivable confirmations were sent and received by the auditors.

The auditors were also warned by a Subaye officer that the company had not controls over cash. But the Walkers did not make any further inquiries and conducted no additional procedures.