SEC Suspends NYC Audit Firm for Ailing to Spot Fraud
The EFP Rotenberg LLP New York based audit company and an accountant from the firm are suspended by the Security Exchange Commission – SEC for deteriorating to spot fraud in the audit reports of Continuity X Solutions which is a public company.
According to SEC, Niholas Bottini an accountant agreed to pay a penalty of $25000, and the audit firm agreed to pay a penalty of $100,000, as part of the settlement. Nicholas, the accountant has been permanently suspended by the SEC from practicing and appearing as an accountant before the SEC, with the exception of, he can participate in audits of public traded companies and in financial reporting. The NYC based audit firm has been suspended only for one year, and can start audits of public traded companies from next year, if a self-governing advisor officially states it has found the reasons behind its disappointment to spot to the fraud. The disappointed audit engaged a Metamora based a public company named Continuity X Solutions, which stated to sell internet services to companies. The Security Exchange Commission has charged Continuity X Solutions’ administrative claiming it engineered a plan to pump up the business’s income through fake sales.
The Security Exchange Commission said that EFP Rotenberg and Bottini unsuccessful to carry out sufficient audit actions to expose the deception in the Continuity X Solutions’ financial statements. According to SEC, the accountant and the firm also did not obtain adequate proof about accounts receivable and revenue recognition to support its audits, nor performed it to spot associated party dealings, inspect claims from business administration that disagreed with facts originate during the audit, carry out actions to determine and file up those contradictions, or prepare due specialized care.