Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Based on this article BELOW, can you help me to SUMMARIZE this? Bally's former chief financial officer John W. Dwyer and former controller Theodore P.

Based on this article BELOW, can you help me to SUMMARIZE this?

Bally's former chief financial officer John W. Dwyer and former controller Theodore P. Noncek also were charged today by the SEC, which previouslycharged Bally with accounting fraud in 2008. Dwyer and Noncek agreed to settle the SEC's charges.

The SEC's order against E&Y finds that the firm identified Bally as a risky audit because its managers were former E&Y audit partners who had "historically been aggressive in selecting accounting principles and determining estimates," and whose compensation plans placed "undue emphasis on reported earnings." Out of more than 10,000 audit clients in North America, E&Y identified Bally as one of E&Y's riskiest 18 accounts and as the riskiest account in the Lake Michigan Area.

The three current E&Y partners charged by the Commission are:

Randy G. Fletchall, the partner in charge of E&Y's National Office

Mark V. Sever, E&Y's National Director of Area Professional Practice

Kenneth W. Peterson, the Professional Practice Director for the Lake Michigan Area office

The three former E&Y partners charged by the Commission are

Thomas D. Vogelsinger, the Area Managing Partner for E&Y's Lake Michigan Area through October 2003

William J. Carpenter, the E&Y engagement partner for the 2003 audit

John M. Kiss, the E&Y engagement partner for the 2001 and 2002 audits

The SEC issued settled cease-and-desist and Rule 102(e) orders finding, among other things, that E&Y partners Sever, Kiss, Peterson, and Carpenter knew or should have known that E&Y's unqualified audit opinions regarding certain Bally financial statements were materially false. Under their respective orders, Sever and Kiss may not appear or practice before the Commission as an accountant for three years, and Peterson and Carpenter may not appear or practice before the Commission as an accountant for two years.

In addition, the SEC issued settled Rule 102(e) orders against Vogelsinger for engaging in repeated instances of unreasonable conduct and Fletchall for engaging in a single instance of highly unreasonable conduct. Under their respective orders, Vogelsinger may not appear or practice before the Commission as an accountant for nine months and Fletchall was censured.

The Commission filed settled civil injunctive actions against former Bally CFO Dwyer and former Bally Controller Noncek. Dwyer settled the Commission case against him by consenting to permanent antifraud and related injunctions, payment of $250,000, a permanent officer-and-director bar, and a permanent bar from practice before the SEC in a related Rule 102(e) proceeding. Noncek settled the Commission case against him by consenting to permanent injunctions and a two-year bar from practice before the SEC in a related Rule 102(e) proceeding. The settlements with Dwyer and Noncek are subject to court approval.

In addition to agreeing to pay $8.5 million to settle the SEC's charges, E&Y agreed to undertake measures to correct policies and practices relating to its violations, and agreed to cease and desist from violations of the securities laws.

Each of the respondents and defendants agreed to settle with the SEC without admitting or denying the charges against them.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Glomont Auditing And Attestation AICPA Released Questions CPA Exam Review 2022

Authors: Glomont, American Institute Of Certified Public Accountants, AICPA

1st Edition

B0BF31GQMC, 979-8353524045

More Books

Students also viewed these Accounting questions

Question

1. Which position would you take?

Answered: 1 week ago