PCAOB Sanctions CPA for Violations Related to Audit Evidence and Her Former Audit Firm for Quality Control Issues

The Public Company Accounting Oversight Board (PCAOB) today announced settled disciplinary orders sanctioning Jennifer A. Crofoot, CPA (“Crofoot”) and Fruci & Associates II, PLLC (“Fruci”) for violations of PCAOB rules and standards in connection with the audits of four public companies. During the relevant time period, Crofoot was an audit partner at Fruci and the engagement partner for the four audits in question.

Violations Found By the PCAOB

As described in further detail in the Crofoot order, in connection with her role as engagement partner on the four audits, Crofoot authorized the issuance of an audit report containing an unqualified opinion in audits:

• Without having performed adequate or, in some instances, any procedures on material accounts; and
• Without having received concurring approval of issuance from an engagement quality reviewer, as required by PCAOB standards.

As described in further detail in the Fruci order, the firm failed to comply with PCAOB quality control standards in connection with the four audits, including with respect to audit documentation and engagement performance. These quality control deficiencies impaired the firm’s ability to prevent or detect Crofoot’s misconduct.

Sanctions Imposed by the PCAOB

The Crofoot order:

• Censures Crofoot;
• Bars her from being an associated person of a registered public accounting firm (with the ability to petition for Board consent to associate with a registered public accounting firm after three years from the date of the order); and
• Requires her to complete 40 hours of continuing professional education (CPE) relating to PCAOB auditing standards, in addition to any CPE required in connection with any professional license, before filing any petition for Board consent to associate with a registered public accounting firm.

The Fruci order:

• Censures the firm;
• Imposes a $50,000 civil money penalty on the firm; and
• Requires the firm to undertake certain remedial actions.

Learn More

Further information about the PCAOB Division of Enforcement and Investigations is available on the PCAOB website. Firms or individuals wishing to report suspected misconduct by auditors, or to self-report possible misconduct, may visit the PCAOB Tips and Referrals page.

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About the PCAOB

The PCAOB is a nonprofit corporation established by Congress to oversee the audits of public companies in order to protect investors and further the public interest in the preparation of informative, accurate, and independent audit reports. The PCAOB also oversees the audits of brokers and dealers registered with the Securities and Exchange Commission, including compliance reports filed pursuant to federal securities laws.