The former CFO of two public companies, four other accountants, and two audit firms have been disciplined for violating professional rules related to audit reviews and conflicts of interest.
The U.S. Securities and Exchange Commission said Florida accountant Peter Messineo and his firm Messineo & Co. skipped mandatory quality reviews for their own audits and performed deficient quality reviews for audits by another audit firm, while his senior accountant, Robin Bigalke, falsified and backdated audit documents to cover up the violations.
Additionally, the SEC said in an administrative order, Messineo falsely certified the financial statements of two public companies he served as CFO and, after merging his firm with DKM Certified Public Accountants, retained ownership stakes in the companies while DKM continued to audit them.
The SEC permanently barred Messineo from practicing as an accountant on behalf of any publicly traded company and suspended Bigalke, Messineo quality reviewer Joseph Mohr, DKM President Charles Klein, and DKM quality review partner Ronald Confessore.
To settle the charges, they also collectively agreed to pay penalties and disgorgement totaling more than $100,000.
“Auditors must follow the professional standards and avoid conflicts of interest when they opine on the financial information reported by public companies,” Paul G. Levenson, director of the SEC’s Boston regional office, said in a news release. “These accountants and their firms showed complete disregard for the basic rules of their profession.”
According to the SEC, DKM was the auditor of the two public companies for which Messineo was CFO. Confessore allegedly acted as the quality reviewer for its audits of the companies at the same time he was employed by Messineo.
Messineo’s certifications of the companies’ financial reports “were false because Messineo knew that [their] auditor, DKM, was not independent,” the SEC said.
Messineo resigned as CFO of the companies before joining DKM in December 2012. But the SEC said he still had ownership interests in the firms when DKM audited the regulatory filings they made in February 2013 and April 2013.