A former PricewaterhouseCoopers auditor has settled charges with the Securities and Exchange Commission over his audits of video game developer Take-Two Interactive Software.

Robert Fish, 60, was assigned by PwC to audit Take-Two's financial statements from fiscal year 1994 to FY 2001. On Dec. 13, 2000 he signed an audit report containing an unqualified audit opinion accompanying Take-Two's fiscal year 2000 financial statements. However, Take-Two had been engaged in a scheme to inflate its reported revenues that year and others. It parked several hundred thousand video games with multiple distributors and improperly recognized approximately $26 million in revenues during FY 2000 (including $11 million from sales recognized at interim periods, which were subsequently returned and reversed at year-end) and inflated its after-tax earnings that year by at least $5 million.

The SEC said that in performing the audits, Fish allegedly departed from generally accepted accounting standards and did not exercise due professional care and professional skepticism. The commission also said he failed to exercise the proper skepticism over Take-Two's reserve accounting for video game returns. He examined five transactions to test for possible cutoff errors to ensure items had not been shipped at year-end and subsequently returned, but he did not compare the returns to the original sales invoices. The SEC said he should have known that Take-Two's FY 2000 financial statements had not been prepared in accordance with generally accepted accounting principles.

The SEC barred Fish, who is retired, from appearing or practicing before the commission as an accountant. However, he may request reinstatement within one year.

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