AP Summary

SEC Suspends New York Public Accountant for Improper Professional Conduct

Sept. 25, 2023

File No. 3-21712

September 25, 2023 - The Securities and Exchange Commission today announced settled administrative and cease-and-desist proceedings against certified public accountant Michael D. Messina, a former engagement quality review partner at Marcum LLP and resident of Dix Hills, New York, for failing to comply with Public Company Accounting Oversight Board (PCAOB) standards while conducting four audits of Ault Alliance, Inc. (AAI).

According to the SEC's order, Messina failed to comply with PCAOB standards in connection with the audits of AAI's financial statements for its fiscal years ended December 31, 2017-2020. Specifically, the SEC's order finds that Messina did not perform an adequate engagement quality review in compliance with the standards of the PCAOB when conducting audits of AAI because he did not: (1) evaluate the significant judgments related to engagement planning and to the engagement team's assessment of, and audit responses to, significant risks identified by the engagement team; (2) evaluate whether the engagement documentation indicated that the engagement team responded appropriately to significant risks and supported the conclusions reached by the engagement team; (3) perform his review with due professional care; and (4) document his review appropriately. These failings led to substantive audit issues going unaddressed in the areas of goodwill and intangibles, crypto miner property and equipment, and related party transactions in the AAI audits for fiscal years 2017-2020 and inadequate documentation of audit work in every year for which he was AAI's EQR partner, 2016-2020.

The SEC's order finds that Messina engaged in improper professional conduct within the meaning of Section 4C(a)(2) of the Securities Exchange Act of 1934 and Rule 102(e) of the SEC's Rules of Practice, and that Messina willfully aided and abetted and caused Marcum's violations of Rule 2-02(b)(1) of Regulation S-X. Without admitting or denying the SEC's findings, Messina consented to cease and desist from committing or causing any violations and any future violations of Rule 2-02(b) of Regulation S-X and to pay a civil penalty of $30,000. Messina further agreed to be suspended from appearing and practicing before the Commission as an accountant with the right to apply for reinstatement after two years.

The SEC's investigation was conducted by Elizabeth Marshall Anderson, Christina McGill, and Michi Harthcock, with assistance from assistant chief litigation counsel Timothy Halloran. The case was supervised by Tim England and Melissa Hodgman.

Last Reviewed or Updated: Sept. 25, 2023