Recently, the U.S. Securities and Exchange Commission (SEC) accused Prager Metis, the accounting firm responsible for the audit of the exchange FTX, of being heavily fined nearly US$1.95 million for improper auditing, which was one of the factors that led to the collapse of FTX and affected users around the world.
He has a long history of false audits and received a heavy sentence of nearly US$1.95 million.
According to CoinDesk, international accounting firm Prager Metis has signed a settlement agreement with the SEC. It was accused by the SEC of improper auditing before the collapse of FTX. The court ordered Prager Metis to pay $740,000 to settle the SEC charges.
The agreement states that the SEC will launch a second investigation due to Prager Metis’s record of misdeeds, which stemmed from the company’s false audits of more than 200 companies from 2017 to 2020 and many violations of accounting independence principles. Prager Metis has now agreed to pay a $1.2 million civil penalty to resolve the charge, with the settlement subject to court approval. Based on the above, a total fine of nearly 1.95 million yuan was imposed.
Lies about meeting auditing standards, lacks professionalism, and rushes to market
The SEC stated that the accounting firm Prager Metis wrote two audit reports for FTX from 2021 to 2022, lying to the SEC that FTX was in compliance with the "Generally Accepted Auditing Standards GAAS". In fact, most aspects of FTX's audits did not comply with the standards at all.
The SEC added that the accounting firm Prager Metis "rushed the ducks to the shelves" and temporarily formed an accounting team to accept the audit business entrusted by FTX. However, this team not only lacked audit-related capabilities, knowledge, and experience. Prager Metis also did not understand the business relationship between FTX and Alameda and Alameda’s role in FTX.
Then he added that because Prager Metis did not take FTX’s audit carefully and seriously, it became one of the key factors in FTX’s collapse, which also led to billions of dollars in losses for global users.
SEC warns monkeys, Prager Metis provides redress and permanent injunction
The SEC's response to this incident can be said to be a warning to the monkey. It not only issued a "permanent ban" on Prager Metis, but also requested remedial measures for the firm, including hiring professional audit consultants to evaluate, master audit quality, and accept "customized requirements from new clients." ”. At the same time, this incident calls on the audit industry to treat its own profession and business with caution and rigor.
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This article Prager Metis was fined US$1.95 million by the SEC due to false audits of FTX. This article first appeared on Chain News ABMedia.