News & Insights


The Securities and Exchange Commission (the “SEC”) has announced settled enforcement proceedings against audit firm BF Borgers CPA PC and its owner, Benjamin F. Borgers (together, “BF Borgers”), charging them with deliberate and systemic failures to comply with Public Company Accounting Oversight Board (“PCAOB”) standards in its audits and reviews of hundreds of public companies, which were incorporated in more than 1,500 SEC filings from January 2021 through June 2023.

The SEC imposed a $12 million civil penalty against the firm and a $2 million civil penalty against its owner, as well as permanent suspensions against both parties from appearing and practicing as accountants before the SEC – effective immediately. Director of the SEC’s Division of Enforcement, Gurbir S. Grewal, noted that “thanks to the painstaking work of the SEC staff, Borgers and his sham audit mill have been permanently shut down.”

The SEC’s investigation found that BF Borgers failed to perform its audit and review engagements in accordance with PCAOB auditing standards, including by failing to adequately supervise the engagements, failing to obtain engagement quality reviews in connection with the engagements, failing to prepare and maintain sufficient audit documentation, and fabricating certain audit documentation, all while falsely representing to its clients and in its audit reports that the firm’s work complied with PCAOB standards.

The SEC found that staff simply “rolled forward” workpapers from previous engagements, changing only the relevant dates, and passed them off as workpapers for current period engagements. These workpapers documented engagement planning meetings that did not occur and falsely represented that a separate engagement quality reviewer had reviewed and approved the work. The SEC found that electronic “sign offs” on the firm’s engagement workpapers that were attributed to the engagement partner, engagement quality reviewer, and staff auditor were in fact all applied by a single staff person within seconds of one another.

Importantly for investors and financial professionals, the SEC order states that as a result of the conduct, certain of the firm’s issuer and broker-dealer clients violated the reporting provisions of the Exchange Act by filing financial statements that had not been audited or reviewed by an independent public accountant in accordance with PCAOB standards.