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U.S. Securities and Exchange Commission

UNITED STATES OF AMERICA
Before the
SECURITIES AND EXCHANGE COMMISSION

SECURITIES EXCHANGE ACT OF 1934
Release No. 49893 / June 18, 2004

ACCOUNTING AND AUDITING ENFORCEMENT
Release No. 2039 / June 18, 2004

ADMINISTRATIVE PROCEEDING
File No. 3-10953


In the Matter of

Michael B. Sullivan, CPA


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ORDER GRANTING APPLICATION FOR REINSTATEMENT TO APPEAR AND PRACTICE BEFORE THE COMMISSION AS AN ACCOUNTANT RESPONSIBLE FOR THE PREPARATION OR REVIEW OF FINANCIAL STATEMENTS REQUIRED TO BE FILED WITH THE COMMISSION

On November 26, 2002, Michael B. Sullivan ("Sullivan") was suspended from appearing or practicing as an accountant before the Commission as a result of settled public administrative proceedings instituted by the Commission against Sullivan pursuant to Rule 102(e) of the Commission's Rules of Practice.1 This order is issued in response to Sullivan's application for reinstatement to practice before the Commission as an accountant responsible for the preparation or review of financial statements required to be filed with the Commission.

During 1997 and 1998, Sullivan engaged in improper professional conduct as the engagement partner on Arthur Andersen's audits and quarterly reviews of the consolidated financial statements of Golden Bear Golf, Inc. ("Golden Bear" or the "Company") for the fiscal years ended 1996, 1997 and 1998. Sullivan was reckless in the performance of his professional duties, namely his failure to direct, supervise and perform audit procedures required by Generally Accepted Auditing Standards. The audited procedures that Sullivan failed to perform primarily involved the Company's changes in accounting and disclosure for percentage-of-completion accounting related to golf course construction contracts. Initially the Company used a methodology based upon actual costs when applying percentage-of-completion accounting to its construction contracts and subsequently changed to an "earned value" methodology that was highly subjective and based upon management's estimates.

In his capacity as a preparer or reviewer, or as a person responsible for the preparation or review, of financial statements of a public company to be filed with the Commission, Sullivan attests that he will undertake to have his work reviewed by the independent audit committee of any company for which he works, or in some other manner acceptable to the Commission, while practicing before the Commission in this capacity. Sullivan is not, at this time, seeking to appear or practice before the Commission as an independent accountant. If he should wish to resume appearing and practicing before the Commission as an independent accountant, he will be required to submit an application to the Commission showing that he has complied and will comply with the terms of the original suspension order in this regard. Therefore, Sullivan's suspension from practice before the Commission as an independent accountant continues in effect until the Commission determines that a sufficient showing has been made in this regard in accordance with the terms of the original suspension order.

Rule 102(e)(5) of the Commission's Rules of Practice governs applications for reinstatement, and provides that the Commission may reinstate the privilege to appear and practice before the Commission "for good cause shown." This "good cause" determination is necessarily highly fact specific.

On the basis of information supplied, representations made, and undertakings agreed to by Sullivan, it appears that Sullivan has complied with the terms of the November 26, 2002 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 Sullivan pursuant to Rule 102(e) of the Commission's Rules of Practice, and that Sullivan, by undertaking to have his work reviewed by the independent audit committee of any company for which he works, or in some other manner acceptable to the Commission, in his practice before the Commission as a preparer or reviewer of financial statements required to be filed with the Commission, has shown good cause for reinstatement. Therefore, it is accordingly,

ORDERED pursuant to Rule 102(e)(5)(i) of the Commission's Rules of Practice that Michael B. Sullivan, CPA is hereby reinstated to appear and practice before the Commission as an accountant responsible for the preparation or review of financial statements required to be filed with the Commission.

By the Commission.

Jonathan G. Katz
Secretary

Endnotes

Rule 102(e)(5)(i) provides:

"An application for reinstatement of a person permanently suspended or disqualified under paragraph (e)(1) or (e)(3) of this section may be made at any time, and the applicant may, in the Commission's discretion, be afforded a hearing; however, the suspension or disqualification shall continue unless and until the applicant has been reinstated by the Commission for good cause shown." 17 C.F.R. 201.102(e)(5)(i).

 

http://www.sec.gov/litigation/admin/34-49893.htm


Modified: 06/18/2004