Gavel

Tunney & Associates to pay USD100,000 penalty for improper audits of FCM

Wed, 30/04/2014 - 06:02

Accounting firm Tunney & Associates (T&A) and owner Michael Tunney are to pay a USD100,000 civil monetary penalty for violating CFTC Regulations when conducting audits for The Linn Group (TLG).

TLG is a CFTC-registered Futures Commission Merchant (FCM).
 
The order, entered on 28 April by Judge Sharon Johnson Coleman of the US District Court, Northern District of Illinois, also permanently prohibits T&A and Tunney from practicing or appearing before the CFTC and from violating the provisions of the CFTC’s Regulations related to independent auditors, as charged.
 
The order stems from a CFTC complaint filed on 18 April 2013 that charged T&A and Tunney with conducting year-end audits of TLG for 2007 through 2011 in violation of Generally Accepted Auditing Standards (GAAS) and CFTC Regulations and failing to report material inadequacies to the CFTC when required to do so.
 
The order finds that T&A and Tunney did not have experience auditing FCMs or any entity that held customer segregated accounts, were not qualified to conduct an FCM audit, and that Tunney lacked sufficient understanding of the applicable Commodity Exchange Act or CFTC regulatory provisions prior to accepting any of the audit engagements.
 
The order also finds that there was no planning for the auditing of TLG, and the audits failed to include appropriate tests of TLG’s accounting system, internal accounting controls, and procedures for safeguarding customer and firm assets.


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