07 MAR 2024 / SERVICES UPDATES

PCAOB Sanctions Gries & Associates for Audit Violations

- MYCPE ONE Insights Team

Summary

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The Public Company Accounting Oversight Board (PCAOB) has sanctioned Gries & Associates and its principal, Blaze Gries, over violations during 2021 fiscal year audit of Tingo, Inc. The PCAOB identified deficient audit work, leading to multiple restatements of Tingo's financial statements, and the firm's registration was revoked, Blaze Gries barred from associating any registered public accounting firm and a civil penalty of $65,000 imposed.

PCAOB Sanctions Gries & Associates for Deficient Audit Work

On March 5, 2024, the Public Company Accounting Oversight Board (PCAOB) announced disciplinary actions against Gries & Associates, LLC, and its principal, Blaze Gries, CPA, for violations of PCAOB rules and standards during the fiscal year 2021 audit of Tingo, Inc.

Audit Deficiencies Identified

The PCAOB found that Gries & Associates and Gries failed to appropriately respond to warning signs indicating that Tingo's financial statements materially misstated billions of dollars in goodwill and tens of millions of dollars in stock-based compensation expense. This deficient audit work led to multiple restatements of Tingo's 2021 financial statements.

Sanctions Imposed

In response to these violations, the PCAOB has taken the following actions:

Revocation of Firm Registration: Gries & Associates' registration with the PCAOB has been revoked.
Bar on Individual: Blaze Gries is barred from associating with any registered public accounting firm.
Civil Money Penalty: A civil money penalty of $65,000 has been imposed on Gries & Associates.

PCAOB's Statement

PCAOB Chair Erica Y. Williams emphasized the importance of auditors responding appropriately to warning signs, stating, "Auditors must respond appropriately when they encounter warning signs. The PCAOB will not hesitate to take action when investors are put at risk."

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