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- Requested AR confirmations from conduct of ContinuityX and conduct refused to furnish and type the confirmations.
- EFP Rotenberg spoke to persons acting as employees of Internet Providers (companies that suitable ContinutyX). Audit team failed to accomplish tit sign on AR entity.
- SEC states: âEFP Rotenberg and Bottini did not drawing or consequence procedures to accomplish tit misdirect audit sign that ContinuityXâs proceeds was allowable or that it was entity recurrent justly. During the ContinuityX Audit, EFP Rotenberg and Bottini accomplished typeed agreements between ContinuityX and the Internet Providersâ customers that shsuitable that the customers who purchased internet employments via ContinuityX did not scheme to use or pay for the internet employments. These agreements systematic that the customers: (1) were not under obligation for paying for the internet employments they purchased from the Internet Providers; (2) ContinuityX was under obligation for paying the Internet Providers for the customersâ monthly internet employment bills; and (3) ContinuityX would pay the customers a one-time legation. In limited, these agreements, when decipher in volatile of the agreements between ContinuityX and the Internet Providers, shsuitable that ContinuityX would pay the customers a kick-back for purchasing internet employments so that ContinuityX could acquire a legation from the Internet Providers.â
- âEFP Rotenberg and Bottini failed to consequence tit procedures to discover these fraudulent sales resisting possessing all of the muniments expedient to substantiate themâ
- They as-well failed to detype and consequence tactile procedures to metaphor out of the proceeds was in-consequence acquireed.
- ContinuityX paid the Internet Providers pawn deposits for the customers, and then when the customers did not pay the Internet Providers used the pawn deposit to the spent due weigh. ContinuityX narrative these pawn deposits as proceeds of $2.1 darling, when they should not enjoy been narrative as proceeds. EFP Rotenberg did not drawing or consequence procedures to enumerate if ContinuityX had the hues to the pawn deposits.
- âDuring the ContinuityX Audit, ContinuityXâs conduct represented to EFP Rotenberg and Bottini that the pawn deposits held by Internet Provider A were ContinuityXâs proceeds. To foundation this assumption ContinuityXâs conduct granted EFP Rotenberg and Bottini behind a while cashierâs hinders drawn from ContinuityXâs bank declaration. However, the cashierâs hinders had the customer rolled as the remitter. EFP Rotenberg and Bottini trustworthy the cashierâs hinders as sign of ContinuityXâs tenure of the pawn deposits and did not investigation why ContinuityX was using cashierâs hinders to pay pawn depositsor why a hinder drawn from ContinuityXâs bank would roll the customer as the remitter. Furthermore, in an email congeniality behind a while Internet Provider A, Bottini was told that Internet Provider A held the pawn deposits for the customers. EFP Rotenberg and Bottini failed to charm advance steps or consequence joined procedures behind entity told by Internet Provider A that the pawn deposits were ContinuityX customersâ deposits, and not ContinuityXâs. EFP Rotenberg and Bottini failed to instruct inconsistencies in the audit sign accomplished to behove reasonably systematic that ContinuityX was truly recording the pawn deposits as proceeds.â
- âBased on the precedent, EFP Rotenberg and Bottiniâs did not drawing or consequence tit procedures to furnish self-possessed impudence of discovering unfair acts that would enjoy a plain and embodied consequence on the choice of ContinuityXâs financial declaration amounts, as required by Section 10A(a)(1) of the Exchange Act. This was demonstrated by EFP Rotenberg and Bottiniâs need to accomplish tit misdirect audit sign that was correspondent to the typeificant risks verified by the promise team. Specifically, EFP Rotenberg and Bottini failed to consequence tit opinion procedures behind conduct refused to furnish declarations receivable confirmations. Furthermore, resisting possessing counsel that contradicted conductâs assumptions, EFP Rotenberg and Bottini failed to instruct inconsistencies in the audit sign. As a termination, EFP Rotenberg and Bottini failed to substantiate ContinuityXâs compulsory proceeds remembrance and the inclusion of customer pawn deposits as congregation proceeds.â
summary each of those behove six memo.