The Securities and Exchange Commission has charged Las Vegas accountant Michael J. Moore and his auditing firm Moore & Associates with issuing false auditing reports prepared by high school graduates who had little to no experience with accounting or auditing.

According to the SEC, Moore and his firm issued audit reports for more than 300 clients that were mainly shell or developmental-stage companies whose stock traded on the over-the-counter bulletin board, or Pink Sheets, which frequently trades in penny stocks.

The SEC alleges that Moore and M&A violated numerous auditing standards, including a failure to hire employees with adequate technical training and proficiency. According to the SEC's complaint, they got little to no training on the job either.

One employee described the training she received when hired in 2006 as “defunct” and stated that in January 2008 an outside auditor sat with her for a week “and taught [her] about the auditing process” and “how to verify what is in the financial statements and do [her] job.” Another employee also testified that she received no formal training and instead observed other employees, saying that she “sort of watched what they did and asked questions.”

To settle the charges, Moore and M&A agreed to disgorge $179,750 plus prejudgment interest of $10,151.59, and Moore separately agreed to pay a $130,000 penalty. Moore and M&A also agreed to be permanently enjoined from future securities violations, and to be suspended from appearing or practicing before the SEC as accountants.

The Public Company Accounting Oversight Board simultaneously instituted and settled disciplinary proceedings to bar Moore from being an associated person of a registered public accounting firm and revoke his firm’s registration with the PCAOB.