Company Filings
FOR IMMEDIATE RELEASE
2022-180
Washington D.C., Sept. 30, 2022 —
The Securities and Exchange Commission today charged audit firm RSM US LLP and three senior-level employees with improper professional conduct for failing to properly audit Revolution Lighting Technologies Inc.’s (“Revolution”) financial statements over a four-year period when Revolution was violating accounting principles by inflating revenue with bill and hold sales.
According to the SEC’s order, RSM’s planning and supervision of the audit, as well as the evaluation of audit results and review of Revolution’s disclosures, all failed to adhere to the Public Company Accounting Oversight Board’s auditing and quality control standards.
The SEC also charged RSM partners Steven Kirn and Richard Condon and senior audit manager Michael Piqueira for their roles in the improper audits. The SEC’s order against the three employees finds that Kirn, RSM’s lead partner on its Revolution audits, and Piqueira, the senior manager on those audits, failed to adequately plan, supervise, and execute the audits. Condon was charged with improperly reviewing and approving RSM’s analysis that inaccurately concluded Revolution’s errors and inflated revenue were immaterial to investors.
“Auditors are important checks against fraud, and they should be scrutinizing arrangements like bill and hold sales,” said Gurbir Grewal, Director of the Division of Enforcement. “RSM failed to do this at all levels, from the engagement team up through the firm’s national office. And by giving Revolution a pass, investors learned only too late that Revolution was committing a multi-year fraud.”
Without admitting or denying the SEC’s findings, RSM agreed to pay a $3.75 million penalty, to be censured, and to retain an independent consultant to review and evaluate its audit, review, and quality control policies and procedures. Without admitting or denying the SEC’s findings, Kirn and Piqueira agreed to be suspended from appearing and practicing before the SEC as accountants, with the right to apply for reinstatement after three years and one year, respectively. In addition, without admitting or denying the SEC’s findings, Condon agreed to a censure. RSM, Kirn, and Piqueira also agreed to a cease-and-desist order.
The SEC’s case is being handled by Peter Moores, Ryan Murphy, Trevor Donelan, Marc Jones, and Michele T. Perillo of the Boston Regional Office.
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