03:57:51 EDT Fri 29 Mar 2024
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SEC fines BDO Canada, others for improper audits

2018-03-14 10:53 ET - Street Wire

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by Mike Caswell

BDO Canada LLP and two other auditing firms have agreed to pay $390,362 in sanctions to settle allegations that their audits of a Canadian company circumvented the oversight of the Public Company Accounting Oversight Board. (All figures are in U.S. dollars.) The SEC said that BDO Canada used a Zimbabwean firm to conduct six years worth of audits, but that firm did not apply the proper standards. In paying the sanctions, BDO did not admit to any wrongdoing.

The penalty for BDO Canada is contained in an order that the SEC filed on Tuesday, March 13. The order arises from what the SEC describes as improper professional conduct from 2006 to 2012 on the audits of a company only identified as "Issuer A." The SEC says that Issuer A is incorporated in Canada and conducts business in South Africa.

The problem, as described by the SEC, involves BDO's use of a third party to audit much of Issuer A's financial statements. BDO used the third party because Issuer A's largest subsidiary, located in Africa, accounted for two-thirds of the issuer's assets and all of its revenue, according to the notice. The third party was an African firm, Deloitte Zimbabwe, the order states.

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