Washington (March 7, 2002) - A Utah CPA who the Securities and Exchange Commission charged with contributing to Itex Corp.'s downfall by failing to skeptically look over the company's financial statements, has been barred from practice for at least three years.
CPA Kevin Andersen audited the barter and business services company's financial statements from 1992-1997 and gave the company unqualified opinions during that time period, although the company eventually had to restate its financials for 1996 and 1997.
The SEC charged the company with overstating revenue and earnings in 1999, and said Andersen knew when he was hired as an auditor that he would not have a complete picture of the company's financial health since they could not turn over work papers from the previous auditor due to a fee dispute. That auditor apparently questioned some noncash transactions the company made, and Andersen's lack of professional skepticism directly led to "audit failures," at the company, the SEC said.
Generally accepted accounting principles "obligated Andersen to contact the prior auditor, which he did not do," the SEC said.
- Electronic Accountant Newswire staff
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