The Public Company Accounting Oversight Board has revoked the registration of Armando C. Ibarra PC of Chula Vista, Calif., and censured Dallas-based Turner, Stone & Co. LLP, citing violations of PCAOB guidelines and auditing standards uncovered during its inspection process.
According to the board both firms “failed to exercise due professional care, skepticism and prepare appropriate audit documentation.”
The audit watchdog said the violations committed by Ibarra PC were revealed in four of its issuer clients from the period between 2003 and 2005.
The report on Turner Stone said the firm committed the audit violations for an issuer client during 2004. Specifically, the board found that CPA Edward Turner, a principal owner of the firm, failed to appropriately address a departure from GAAP concerning the recognition of loan origination fees as revenue for Nevada-based business developer 21st Century, as well as the company’s failure to properly disclose a related party transaction. The board has barred Turner from being an associated person of a registered public accounting firm.
Both Ibarra’s firm, as well as Turner, may also reapply for registration after a two-year period.
The reports are available online, at www.pcaobus.org/Enforcement/Disciplinary_Proceedings/2006/12-19_Ibarra.pdf, and www.pcaobus.org/Enforcement/Disciplinary_Proceedings/2006/12-19_Turner_Stone.pdf.
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