Financial regulators have permanently banned the accounting firm that was hired by the parent company of Donald Trump’s media platform. This action was taken following an enforcement investigation, which uncovered that the firm was not actually conducting audits. Instead, they were simply copying old work and forging the dates on new documents. It is important to note that the investigation did not include any work performed for the Trump Media and Technology Group, which is associated with the Republican presidential candidate.
The SEC’s investigation has revealed that the accounting firm BF Borgers, based in Lakewood, Colorado, and its owner Benjamin F. Borgers, failed to conduct proper audits and oversight of public companies’ financial filings. This failure was described as a deliberate and systematic breakdown within the firm. During the investigation, it was discovered that Borgers instructed audit staff to copy previous workpapers from past audits and present them as final audit workpapers for new clients. Although the staff updated the balance sheet dates and completion dates, all other information remained unchanged from the previous audit or quarterly review. Additionally, Borgers falsely documented nonexistent work by claiming to have met with engagement partners to discuss potential risks associated with the audits.
According to Gurbir S. Grewal, Director of the SEC’s Division of Enforcement, Ben Borgers and his audit firm, BF Borgers, have been held accountable for one of the most significant instances of gatekeeper failures in our financial markets. Grewal emphasizes the critical role that accountants and accounting firms play in our financial markets, as investors rely on audited financial statements when making investment decisions. However, Borgers and his firm neglected their responsibilities in this regard. Fortunately, thanks to the diligent efforts of the SEC staff, Borgers and his fraudulent audit operation have been permanently closed down.
Regulators have stated that Borgers, in his role as the engagement partner, was responsible for reviewing and supervising audit work. However, it was found that there were no planning meetings conducted and Borgers had minimal interaction with the staff level auditors. The Securities and Exchange Commission (SEC) has revealed that Borgers falsified workpapers with the intention of creating the false impression that the firm’s audit engagements were compliant with public accounting standards, despite knowing that the reports were fraudulent.
Trump Media responded to the SEC’s ban by terminating Borgers and bringing on board Semple, Marchal & Cooper, LLP, an accounting firm based in Phoenix, Arizona. As per a 2018 PCAOB report, the firm operated from a single office and served three issuer audit clients. With six partners and 13 professional staff members, it is worth noting that Trump Media boasts a market cap of $6.7 billion.
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