United States, the Securities and Exchange Commission fines auditors in connection with the listing of Akazoo

United States, the Securities and Exchange Commission fines auditors in connection with the listing of Akazoo

The US Securities and Exchange Commission (SEC) imposed a fee Karaoke (a London-based auditing firm), its CEO Nigel Bostock and chief auditor Matthew Stalabras to the music streaming company’s poor review akazu. Crowe UK, Bostock and Stalabras have agreed to settle the SEC’s charges.

Under an SEC order, Crowe UK has released a Financial statement audit report 2018 by Akazoo. However, after Akazoo went public in September 2019 through a merger with SPAC, it turned out that the company’s 2018 financials They incorrectly reported earnings of $120 millionwhen Akazoo only had a small income.

The matter found that Crowe UK claimed it conducted its 2018 audit in accordance with the standards of the Public Company Accounting Oversight Board (PCAOB) when Akazoo’s audit team had virtually no experience or training on PCAOB standards. Furthermore, the decree notes that the audit team ignored red flags when, for example, You have not exercised the appropriate level of professional care or skepticism When Akazoo submitted fake agreements and fake confirmation letters. The matter found that Crowe UK made false statements when it said Akazoo had correctly provided its financial statements.

“Crowe UK’s inability to adequately control Akazoo contributed to the atmosphere of legality that allowed Akazoo to become a public company,” said Eric Werner, Regional Director of the Fort Worth office. We will continue to hold the gatekeepers accountableparticularly those whose professional failures allow financial fraud to enter our public markets.”

Without acknowledging or denying the SEC’s findings, Crowe UK, Bostock and Stallabrass have agreed to settle charges and pay Fines of $750,000, $25,000 and $10,000respectively.

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