The board pointed to violations in multiple audits in issuing its decision. All of these involved financial statements for 2009 fiscal years audited by Lake and his firm. The issues involved included MediaNet Group Technologies, China Logistics, China Education and China Fruits. Lake was found to have generally failed to plan audits adequately; perform sufficient audit procedures on material accounts, including revenue, accounts receivable, and inventory or prepare and maintain sufficient audit documentation.

In the case of MediaNet Group Technologies, the company reported 2009 revenue of about 2009. Lake and his firm failed to test reported revenue even though the firm obtained a schedule from management that indicated revenue may have been overstated by more than 80 percent.

Lake also failed to provide evidence of the value of existence of $3.8 million in inventory for China Logistics, know known as Hutech21 which represented more than 35 percent of the company's assets for fiscal 2009.