Three former audit partners settled separate SEC charges (see here, here and here) for improperly sharing the answers to examinations on training courses internally administered by their firm.
In separate Orders Instituting Public Administrative and Cease-and-Desist Proceedings, the SEC found that the former audit partners improperly shared questions and answers to the examinations, which were conducted by the firm to ensure that its audit staff understood certain accounting and auditing principles. The Orders also found that once the firm started investigating potential cheating on the examinations, the audit partners falsely denied sharing answers and/or deleting their text messages despite the firm having requested that they preserve the text messages.
These enforcement actions follow the SEC's action against the firm for misconduct related to the examinations, as well as for altering past audit work after receiving confidential Public Company Accounting and Oversight Board ("PCAOB") information about inspections of the firm (see previous coverage).
Without admitting or denying the allegations, each of the former audit partners settled the SEC charges by agreeing to (i) cease and desist from further violating PCAOB Rule 3500T, and (ii) a ban from "appearing or practicing" before the SEC as an accountant, with a right to reapply after three years, two years, and one year, respectively.
Originally published May 19, 2020.
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