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Shocking news just out on BF Boogers, FT Alphaville’s favourite US auditing firm and the go-to-guys for Donald Trump’s social media empire.
Per MainFT’s Stephen Foley:
The US Securities and Exchange Commission has shut down the auditor of Donald Trump’s social media company, accusing it of “massive fraud”.
The US regulator said the firm, BF Borgers, and its founder, Ben Borgers, were responsible for “one of the largest wholesale failures by gatekeepers in our financial markets”.
Borgers, one of the most prolific auditors of US public companies, was charged on Friday with falsely representing to clients that the firm’s work would comply with US standards, and fabricating audit documentation.
Without admitting or denying the SEC’s findings, the firm has agreed to pay a $12mn penalty and Ben Borgers to pay $2mn.
The SEC’s full order is well worth your time, but here are some of the juicy details that caught our eye:
4. […] Among other things, as engagement partner, Borgers failed to conduct or participate in audit planning meetings and to review important workpapers for many audits, including workpapers relating to his purported supervision and review of the engagement team’s work and conclusions.
16. Borgers instructed BF Borgers audit staff and contractors to copy workpapers from previous engagements as the final workpapers for new engagements. Specifically, audit staff updated the balance sheet date and date of completion on the workpapers, but all of the other information indicating the substantive work done on the engagement was simply copied from the corresponding workpaper from the previous audit or quarterly review
17. For example, each engagement had a workpaper called “Engagement Team Discussion” which purported to document a planning meeting held by the engagement team at the beginning of the engagement . . . But, at BF Borgers, those planning meetings did not occur. Instead, the staff level auditor simply rolled forward the Engagement Team Discussion workpaper from the prior year or quarter, updating the balance sheet date information on the document and inserting a new (and false) date of a planning meeting that never happened.
20. BF Borgers had audit management software which permitted individuals to electronically “sign off” on workpapers. But Borgers did not use that software to sign off on workpapers. Instead, Borgers instructed a staff member to electronically sign off on all workpapers for each engagement within the firm’s audit management software. Borgers provided that staff member with usernames to create the false appearance of separate sign offs by the staff auditor, the engagement partner, and the EQR on individual workpapers. In reality, all of those sign offs were done by the same staff person within seconds of each other.
21. According to Borgers, his emails were the only written records evidencing the work he performed as engagement partner on BF Borgers engagements. However, Respondents did not include any of those emails as part of the workpapers retained by BF Borgers. They also failed to preserve the vast majority of Borgers’ emails that pre-dated March 2023 by permitting those emails to be auto-deleted due to purported storage-size limitations on the firm’s computer systems.
It’s unclear at pixel time whether the $2mn civil penalty personally levied against BF Borgers’ founder will be split with alter-aliases Ben F Brogers, Blake F Borgers, Ben F Vonesh and Ben F orgers, or some combination of the above.
For anyone considering applying for Trump Media & Social Group’s newly-vacant auditing gig, the bar has been set terrifyingly low. EY, this is finally your time to shine.
Further reading
— Trump Media’s auditor is really bad at spelling his own name
Read the full article here
