Fifteen accounting firms have drawn disciplinary action from the Securities and Exchange Commission and Public Company Accounting Oversight Board. All of the actions involve the regulators' findings that the firms violated independence standards by using data provided from broker-dealer audit clients to prepare financial statements for those same clients.The SEC censured eight accounting firms stating that their use of data provided by clients to prepare the statements meant they were essentially auditing their own work. The firms, which did not admit or deny the findings in settling the issues, agreed to take remedial steps to prevent a repetition.
The SEC imposed civil money penalties on the firms it took action against except for Brace & Associates of Londonderry, N.H., and Robert Cooper & Co. of Chicago, Ill. These penalties for the other six businesses totaled $140,000. The following firms were censured and agreed to pay civil money penalties: BKD, Springfield, Mo., $15,000; Boros & Farrington Accountancy Corp., San Diego, Calif., $30,000; Lally & Co., Pittsburgh, Pa., $10,000; Lerner & Sipkin CPAs, New York, N.Y., $55,000; OUM & Co., San Francisco, Calif., $10,000; and Joseph Yafeh CPA, Los Angeles, Calif., $10,000.
The PCAOB similarly disciplined seven firms for the same alleged independence issues. A civil money penalty of $2,500 each was imposed.
The seven firms consenting to the disciplinary orders were Alexander Thompson Arnold, Tennessee and Kentucky; Dean Dorton Allen Ford, Louisville and Lexington, Ky.; Goldman & Co., Marietta, Ga.; Lederman Zeidler Gray & Co., Beverly Hills, Calif.; Leonard Rosen & Co., New York, N.Y.; Raines and Fischer, New York, N.Y.; and Raphael and Raphael, Massachusetts and New Jersey.