Sunbeam's Ex-Auditor And Execs Settle With SEC

The Securities and Exchange Commission announced the settlement of its charges against the audit partner on Sunbeam's 1996 and 1997 year-end financial statements and the company's former controller and chief accounting officer.

The former auditor from Arthur Andersen neither admitted nor denied wrongdoing. Although the SEC agreed to withdraw the fraud charges that had been lodged against him as part of a May 2001 civil lawsuit, he was still barred from practicing before the Commission as an accountant for three years. The SEC had accused him of:

  • Accepting uncorroborated representations of Sunbeam's management in lieu of performing appropriate audit procedures.

  • Failing to perform sufficient audit procedures and obtain sufficient information to determine whether the financial statements were in conformity with generally accepted accounting practices (GAAP). Key issues involved the company's excessive restructuring and litigation reserves at year-end 1996.

The former controller and the former vice president of sales were fined $100,000 each and barred from violating the anti-fraud, reporting, books and records, and internal controls provisions of the securities laws. The former controller was also barred from serving as an officer or director of any public company for a period of five years. The charges were settled without admitting or denying wrongdoing.

The SEC said these settlements resolve all outstanding matters in the Sunbeam litigation.

You may like these other stories...

The Public Company Accounting Oversight Board (PCAOB) on Tuesday adopted a new auditing standard and amendments in three areas of the audit that could pose an increased risk of material misstatement in company financial...
Read more from Larry Perry here and in the Today’s World of Audits archive.In my last article, I presented an overview of one of the first steps in the preplanning phase of an audit engagement: reviewing prior year...
Read more from Larry Perry here and in the Today’s World of Audits archive.AU-C Section 800, Special Considerations—Audits of Financial Statements Prepared in Accordance with Special Purpose Frameworks (SPFs),...

Upcoming CPE Webinars

Jul 16
Hand off work to others with finesse and success. Kristen Rampe, CPA will share how to ensure delegated work is properly handled from start to finish in this content-rich one hour webinar.
Jul 17
This webcast will cover the preparation of the statement of cash flows and focus on accounting and disclosure policies for other important issues described below.
Jul 23
We can’t deny a great divide exists between the expectations and workplace needs of Baby Boomers and Millennials. To create thriving organizational performance, we need to shift the way in which we groom future leaders.
Jul 24
In this presentation Excel expert David Ringstrom, CPA revisits the Excel feature you should be using, but probably aren't. The Table feature offers the ability to both boost the integrity of your spreadsheets, but reduce maintenance as well.