FTX accounting firm Prager Metis to pay $1.95 million to SEC to settle improper audit allegations

Odaily Odaily News: International accounting firm Prager Metis agreed to pay $745,000 to settle U.S. SEC charges related to the firm's improper audit of FTX before its collapse in November 2022. The settlement announced on Tuesday also includes the SEC's resolution of the second investigation into Prager Metis, which accused the firm of violating auditor independence rules in its audits of more than 200 companies between 2017 and 2020. Prager Metis agreed to pay $1.2 million in civil penalties and prejudgment interest to resolve the charges. The settlement is subject to court approval. The SEC accused Prager Metis of negligent fraud. In two audit reports prepared by Prager Metis for FTX in 2021 and 2022, the SEC stated that the company falsely stated that the audit was in compliance with generally accepted auditing standards (GAAS), when in fact, the company "failed to comply with GAAS in multiple aspects of the audit." According to the SEC, Prager Metis "did not adequately assess whether it had the capabilities and resources to conduct audits of crypto exchage." In addition to the fine, Prager Metis also agreed to a permanent injunction and remedial measures, including hiring an independent consultant to review and evaluate its audit and quality control policies, and "accepting certain restrictions on new audit clients." (CoinDesk)