Madoff’s Auditor Charged With Securities Fraud

David G. Friehling and his firm Friehling & Horowitz, CPA’s, P.C. have been charged with securities fraud by the Securities and Exchange Commission in connection with audits of the financial statements of Bernard L. Madoff Investment Securities LLC.  The SEC charges that from 1991 through 2008, Friehling & Horowitz issued audit reports on the financial statements of Madoff’s company, indicating that the statements were fairly presented in accordance with generally accepted accounting principles, when in reality no legitimate audits had been performed.  The SEC further contends that Friehling was aware that the audited financial statements would be filed with the SEC and distributed to investors represented by Madoff. 

http://www.sec.gov/litigation/litreleases/2009/lr20959.htm

Comments (1)

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written by Concerned Citizen, May 04, 2009

It's my understanding that auditors are required to perform procedures to detect fraudulent activities. Is it your understanding that the SEC is charging the CPA's because they didn't perform fraud procedures or because their standard procedures were deficient? Would "normal" audit procedures have caught such scheme?

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