AP Summary

SEC Charges Accounting Firm With Audit Failures

June 14, 2018

File No. 3-18542

June 14, 2018 – The Securities and Exchange Commission today announced that national audit firm RSM US LLP agreed to settle charges that it engaged in improper professional conduct while conducting a flawed audit of the financial statements of a private oil and gas fund.

According to the SEC’s order instituting administrative proceedings, RSM repeatedly violated professional auditing standards and issued an audit report on financial statements that included a schedule of investments which was materially misstated because it failed to separately report the fair value of the investments held by the fund, as required by Generally Accepted Accounting Principles. The order also finds that RSM did not perform adequate audit procedures on the fund’s schedule of investments to obtain sufficient evidence for their fair value. In addition, RSM failed to meet the American Institute of Certified Public Accountants established Quality Control Standards for CPA firms’ accounting and auditing practices that required competency and proficiency in client acceptance and continuance, staffing, and supervision on the audit, which were necessary for audits conducted in accordance with Generally Accepted Auditing Standards.

The SEC order finds that RSM engaged in improper professional conduct pursuant to Section 4C of the Securities Exchange Act of 1934 and Rule 102(e) of the SEC’s Rules of Practice. Without admitting or denying the SEC’s findings, RSM has agreed to be censured and to comply with undertakings including performing and completing a review and evaluation of the sufficiency and adequacy of certain RSM quality controls and policies and procedures.

The SEC’s investigation was conducted in its Chicago Regional Office by Michael Mueller, Donald Ryba, Ana Doncic, and Daniel Hayes, and was supervised by Steven Klawans.

Last Reviewed or Updated: June 14, 2018