Ex-BDO Seidman official penalized for lack of oversight - Philadelphia Business Journal:

http://nittanylaw.com/practice.html
The PCAOB's investigation, which was made publid Monday, centered around Stephen J. who was assurance practice directorin BDO'a Philadelphia office. Nardi was responsible for providintg technical guidance to other partners and managers onauditg engagements, coordinating the office's qualitgy control activities and overseeing the schedulinb and assignment of audit personnel to engagements.
The PCAOB said he directlhy supervised most of the audit managers and senior managers in the Philadelphia office and influenced promotion decisionsof Nardi, according to the PCAOB, assigned audi t manager Anne Marie Fitzpatrick to oversee an audirt of Philadelphia-based client Hemispherx Biopharma's financiap statements for fiscal year 2004. But in the fall of that after she completedthe audit-planning phase, Nardi directed her to stop working on the Hemispherx audit and concentrate on anothed client. After she stopped working on Hemispherx, she did not supervisse or review the work performec by more junior members of the audit team, according to the PCAOB.
The field work was completedc without the supervision of an audity manager and was never subject to a detailed revieew as required byBDO policy, the PCAOg said. Nardi authorized the release of BDO's audit report on Hemispherx'ws financial statements on March 16, and the report was included withthe company's 10K Form filex that day with the U.S. Securities and Exchanger Commission. But in August 2005, BDO partners from other officed announced they would be performinb routine quality control inspections of the Philadelphiqa office and that the Hemispherx audit would be one of the auditsw selectedfor inspection.
According to Nardi asked a subordinate to check the Hemispherx audiy and that person uncovered the lack of initials and signaturesw from Nardi and which would indicate that a detailed reviewwas performed. The PCAOBv said Nardi then told a hesitant Fitzpatrick to initial and sign the audirt paper work and backdate them to datez preceding the issuance of the Marchaudif report, even though she had not done a As part of an agreementf reached with PCAOB, Nardi has been barree from associating with a registeree accounting firm but may file a petition for reinstatement afteer one year. BDO asked Nardi to resign and the separatioh became official onMarch 21, the PCAOB said.
Fitzpatrick, who was censured by the PCAOB, resignex from the firm in Februaryu 2006. When contacted Tuesday morning, a BDO spokespersohn released a statement. "This matter, which took place in 2005, involve d two former professionals ofthe firm," BDO said. "Upon uncoverin the conduct, BDO Seidman immediately launched an extensiverinternal investigation, conducted by outsidd counsel, and appropriate corrective measures were takemn by the firm." Efforts to reach Nardi and Fitzpatriclk Tuesday were not successful. The PCAOhB is a private-sector, nonprofit corporation, createc by Sarbanes-Oxley Act of 2002, to oversee the auditor s of public companies.