A government-sponsored enterprise alleged that a Big Four accounting firm should have detected material misstatements due to fraud in its audits of one of the nation’s largest privately held mortgage firms. The defendant argued that the fraud was sophisticated with widespread collusion, and implied that it was, therefore, undetectable.

On behalf of plaintiff, BVA evaluated expert reports regarding detectability of the fraud. Explained the role of forensic procedures in audits and evaluated auditors’ compliance with AU 316 over multiple years. Determined that the fraud was not undetectable and that the auditors did not respond adequately to identified red flags.

Regions Bank sought damages related to a $66 million loan to Color Star, a group of agricultural companies that grew a variety of indoor and outdoor plants for retail sale.  Lender plaintiffs alleged an accounting fraud.

BVA provided expert analysis and deposition testimony regarding (1) Color Star’s processes for counting and valuing physical inventory (live plants and materials), and (2) the adequacy of procedures performed by Color Star’s independent auditors to test inventory account balances.

The SEC alleged that the CFO of a publicly traded touchscreen cover manufacturer failed to adequately disclose certain agreements as required under GAAP milestone accounting, and did so knowingly, with severe recklessness, or at least negligently.  The SEC sought over $1 million in disgorgement and penalties from the CFO.

On behalf of Defendant CFO, BVA analyzed evidence to determine whether the CFO had exercised the degree of care that a reasonably prudent accountant would have exercised in the circumstances. Determined that the CFO had exercised an appropriate degree of care.  Issued an expert report and testified at deposition.