SECURITIES EXCHANGE ACT OF 1934
Release No. 43071 / July 26, 2000
ACCOUNTING AND AUDITING ENFORCEMENT
Release No. 1289 / July 26, 2000
ADMINISTRATIVE PROCEEDING File No. 3-9594
In the Matter of Leslie A. Danish, CPA
Respondent.
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ORDER GRANTING APPLICATION FOR REINSTATEMENT TO APPEAR AND PRACTICE AS AN ACCOUNTANT |
On April 30, 1998, Leslie A. Danish, CPA ("Danish") was denied the privilege of appearing or practicing before the Commission as an accountant as a result of settled public administrative proceedings instituted by the Commission against Danish pursuant to Rule 102(e)(1)(ii) of the Commission's Rules of Practice.1 This order is issued in response to his application for reinstatement to appear and practice before the Commission as an accountant.
Towers Financial Corp. ("Towers") formed Towers Healthcare Receivables Funding Corporations I through V (the "Funding Corporations") in July 1990 to raise funds through private bond offerings to institutional investors. The proceeds from the offerings were to be used for the purchase of accounts receivable from Towers, which, in turn, was to acquire accounts receivable from healthcare providers. The financial statements of the Funding Corporations for the year ended June 30, 1992 reported $300 million of purchased healthcare receivables as assets, which served as collateral for the bonds as required by the bond indentures. The fiscal 1992 financial statements of the Funding Corporations departed from GAAP as a result of the failure to properly account for disbursements to certain healthcare providers as loans to such providers and the failure to provide an allowance for uncollectible amounts on such loans.
Danish, as the engagement partner on the fiscal 1992 audits, was responsible for Richard A. Eisner, LLP's issuance of audit reports containing unqualified opinions on the Funding Corporations' fiscal 1992 financial statements. The suspension order alleged that these audit reports erroneously stated that the financial statements were prepared in conformity with GAAP and the audits were conducted in accordance with GAAS, and that in performing the fiscal 1992 audits of the Funding Corporations, Danish departed from GAAS in the following significant respects. Danish relied excessively on management representations and failed to maintain an attitude of professional skepticism. Furthermore, Danish failed to obtain sufficient, competent evidential matter to support the Funding Corporations' balance sheet classification of the loans to healthcare providers, and the lack of need for bad debt provisions related to such loans. Additionally, Danish failed to undertake sufficient procedures to determine whether illegal acts had occurred at the Funding Corporations, in light of the information coming to his attention during the audits.
On the basis of information supplied, representations made, and undertakings agreed to by Danish, it appearing that Danish has complied with the terms of the April 30, 1998 order suspending him from practice before the Commission as an accountant, that no information has come to the attention of the Commission relating to his character, integrity, professional conduct or qualifications to practice before the Commission that would be a basis for adverse action against Danish pursuant to Rule 102(e) of the Commission's Rules of Practice, and that Danish's undertaking to comply with the terms for reinstatement contained in the suspension order in his practice before the Commission, is fair and in the public interest, it is accordingly,
ORDERED pursuant to Rule 102(e)(5)(i) of the Commission's Rules of Practice that Leslie A. Danish, CPA is reinstated to appear and practice before the Commission as an accountant.
By the Commission.
Jonathan G. Katz
Secretary
Footnotes
1 See Accounting and Auditing Enforcement Release No. 1030, dated April 30, 1998. Danish was permitted, pursuant to the order, to apply for reinstatement after eighteen months upon making certain showings.