Danny McCance 5 Dec 2017 10:58am

US audit firm charged with fraud

Anton & Chia, a California-based firm has been charged for carrying out faulty audits and unsound reviews of financial statements

Accountants employed by the firm had ignored numerous instances of fraudulent financial reporting by clients, the Securities and Exchange Commission’s (SEC’s) Enforcement Division alleged.

It’s co-owners Gregory A Wahl and Georgia Chung, former partner Michael Deutchman, and former audit manager Tommy Shek are all being charged alongside the firm for their involvement.

The fraudulent reports related to three of the firm’s clients in particular, microcap companies Accelera innovations, Premier Holding and CannaVEST.

The SEC found that rather that flagging fraudulent conduct, Anton & Chia were facilitating it, and subsequently charged the company with violations of the Securities Exchange Act.

Former partners Richard J Koch and Rahuldev Gandhi both settled with the SEC, agreeing to pay a $15,000 fine each and accept suspension from acting as accountants. Gandhi will be able to apply for reinstatement in three years, and Koch in two years.

Last month, the SEC released its financial reports for 2017, revealing that it had yielded $2.9bn from successful prosecutions in the last year.

The month prior to this, the SEC made history in approving landmark changes to US auditor reporting by agreeing to the adopt the Public Company Accounting Oversights Board’s (PCAOB’s) New Auditor’s Reporting Standard.