SEC Charges Auditors with SOX Violations

The Securities and Exchange Commission (SEC) charged 69 auditors with issuing audit reports on the financial statements of public companies although the firms were not registered with the Public Company Accounting Oversight Board (PCAOB).

The regulator claims that the 37 unregistered audit firms and 32 audit partners violated the Sarbanes-Oxley Act of 2002, which requires that accounting firms that prepare and issue audit reports on the financial statements of public companies must be registered with the PCAOB, according to a statement. The SEC issued 29 settled and 10 contested orders.

The 69 firms and partners named in the action were collectively responsible for issuing 60 audit reports for 53 companies between November 2003 and October 2005, according to the SEC.

Twenty-eight firms and 22 partners agreed to settlements in which the Commission found that each audit firm issued between one and eight audit reports while unregistered and ordered the firms and partners to not further violate the registration provision of Sarbanes-Oxley, Section 102(a).

Two firms charged by the SEC agreed to disgorge audit fees they received for their audits, while the other settling firms that received audit fees returned the fees to their issuers during the course of the SEC’s investigation.

A list of the firms can be found here.