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SEC ICTV
The Securities and Exchange Commission (SEC) has a large responsibility for ensuring that the country's vital economic needs are protected. The purpose of this essay is to discuss a real world and practical application of the SEC's involvement in a case where accounting malfeasance was suspected and ultimately proven true in a court of law. This essay will examine the case of International Commercial Television Inc. (ICTV) and its accounting blunder that cost the accounting firm of Dohan & Company its repuatation and penalties.
According to the official SEC complaint, violation of Section 21(d) of the Securities exchange act was committed by ICTV's submission of their accounting statements. "These proceedings arise out of Respondents' improper professional conduct during their audit of International Commercial Television, Inc.'s ("ICTV") 2007 financial...
During fiscal year 2007, ICTV improperly recognized revenue and incorrectly recorded product returns, resulting in a material overstatement of revenue and net income. Respondents' audit of ICTV's 2007 financial statements failed to comply with numerous Public Company Accounting Oversight Board ("PCAOB")auditing standards. These included failing to demonstrate the required level of proficiency, failing to exercise due care and professional skepticism, failing to obtain sufficient evidential matter, failing to plan the audit, and failing to supervise the audit staff. As a result, Respondents Dohan and Brown and others caused Respondent Dohan + Co. To issue an unqualified audit report for ICTV's 2007 Form 10-K/SB that incorrectly stated that the audit had been conducted in accordance with the PCAOB's auditing standards and that ICTV's financial statements were fairly…
References
The United States Securities and Exchange Commission. Administrative Proceeding 3-997, 20 Jan 2007. Retrieved from http://www.sec.gov/litigation/admin/2011/34-63740.pdf
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