SEC Charges Audit Firm Spicer Jeffries and Engagement Partner Sean P. Tafaro with Improper Professional Conduct

The SEC has charged Spicer Jeffries LLP, an audit firm based in Denver, and its audit engagement partner Sean P. Tafaro with improper professional conduct due to deficiencies in their audit process. The SEC found that during audit planning, Spicer Jeffries and Tafaro identified valuation of investments as a significant fraud risk but did not take the appropriate steps to respond to it. Spicer Jeffries and Tafaro also failed to obtain sufficient audit evidence to measure fair value, used faulty valuation models, and disregarded alternative valuation assumptions. Furthermore, Spicer Jeffries’ inadequate system of quality control led to them failing to adhere to auditing standards. As a result, Spicer Jeffries and Tafaro were found guilty of improper professional conduct and have consented to SEC's order. Spicer Jeffries will be censured and is required to retain a consultant to review and evaluate audit, review and quality control policies and procedures. Tafaro will be suspended from appearing and practicing before the SEC for one year, after which he may apply for reinstatement.