SEC Charges NY Audit Firm and Accountants for Failures in Audits of China-Based Companies

The SEC announced sanctions against a New York-based audit firm, Sherb Co. LLP, and its founder, two other partners, and an audit manager for their roles in the failed audits of three China-based companies publicly traded in the U.S.

An SEC investigation found that Sherb Co. and its auditors falsely represented in audit reports that they had conducted the audits in accordance with U.S. auditing standards, when in fact they were improperly conducted. One of the companies audited, China Sky One Medical Inc., has since been charged by the SEC with financial fraud.

See: SEC Order against Sherb Co; SEC Press Release. See also: SEC Complaint against China Sky One Medical.