The PCAOB said the firm and partner Kevin Olvera failed to properly evaluate three significant estimates that AAC used to value substantially all of its client-related revenue and accounts receivable, while another partner, Michael Musick, failed to exercise due professionalism in his engagement quality review of the 2017 audit.

Musick was found to have accepted the engagement team’s judgments related to the evaluation of the estimates instead of identifying audit work deficiencies.

The body noted that the firm and the partners ignored several red flags that called into question the reasonableness of the estimates. This occurred despite BDO, Olvera, and Musick encountering several red flags that raised doubts about the reasonableness of the estimates.

The board fined Olivera $35,000 and limited his ability to act in certain audit roles. Musick was fined $25,000. Both individuals are required to complete additional Continuing Professional Education (CPE) work.

Bob Scott

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Bob Scott has provided information to the tax and accounting community since 1991, first as technology editor of Accounting Today, and from 1997 through 2009 as editor of its sister publication, Accounting Technology. He is known throughout the industry for his depth of knowledge and for his high journalistic standards.  Scott has made frequent appearances as a speaker, moderator and panelist and events serving tax and accounting professionals. He  has a strong background in computer journalism as an editor with two former trade publications, Computer+Software News and MIS Week and spent several years with weekly and daily newspapers in Morris County New Jersey prior to that.  A graduate of Indiana University with a degree in journalism, Bob is a native of Madison, Ind