Cardsmax The Accounting and Auditing Enforcement Release Essay

Open, View, and/or
Download this Document

Total Length: 954 words ( 3 double-spaced pages)

Total Sources: 1

Page 1 of 3

Cardsmax



The Accounting and Auditing Enforcement Release (AER) for this proceeding is no. 3288 June, 2011. In this case there was a violation of Section 10A of the exchange Act by L&H, Howley and Wood 2005 & 2006-year-end audit, in addition this proceeding also discussed the year-end audits and quarterly interim reviews of the financial statements of Locate Plus Holdings Corporation ("Locate Plus") (Collectively "the Engagements"). Howley served as the Engagement Partner and Wood served as the Concurring Partner on the Engagements. The complaint alleges that, as part of Locate Plus' fraud, its CEO and CFO created a fictitious customer called Omni Data Services, Inc. ("Omni Data") and that Locate Plus then improperly recognized revenue from Omni Data. The improper Omni Data revenue was included in Locate Plus' financial statements that were part of quarterly and annual reports for fiscal years 2005 and 2006 and were included in filings with the Commission (Securities Exchange Act of 1913).



The proceeding conclude that, Locate Plus falsely reported more than $6 million from Omni Data for fiscal years 2005 and 2006, this amount accounted for over 25% of Locate Plus' total revenue for those two years. On November 10, 2010, the Commission amended its complaint to include charges against Jon R. Latorella, Locate Plus' former CEO, and James C. Fields, Locate Plus' former CFO, alleging that, among other violations, they each violated the antifraud provisions, and aided and abetted Locate Plus' violations of the reporting provisions, of the federal securities laws (Securities Exchange Act of 1913).

Stuck Writing Your "Cardsmax The Accounting and Auditing Enforcement Release" Essay?

View All Our Example Cardsmax The Accounting and Auditing Enforcement Release Essay

Have A Custom Example Essay Written





2. Explains in detail the accounting, auditing, and/or disclosure issue that gave rise to each violation.

The issues with the current case in question are almost too numerous to mention. The first issue that was presented was the Omni Data was a bogus customer (disclosure). Fraudulently Omni Data would purchase services from Locate Plus and make a fictitious payment to Locate Plus. These Payments were them marked as revenue in its financial results. These results were included in the filings sent periodically to the commission. L&H were unable to locate and verify the existence of the ASR notes receivable. The note carried a zero balance on the Locate Plus balance sheet (accounting issues). This was one of the most significant if not the primary issue; the company now had to account for fraudulent accounting that was utilized to make it look as if Omni Data had revenue.

In June 2005, L&H were made aware of various red flags associated with the revenue from Omni Data which resulted in receivables on Locate Plus (Accounting & disclosure). L&H was unable to find records for Omni Data on the Connecticut Secretary of State's website (i.e., the state where Omni Data was purportedly located); secondly, that the alleged President of Omni Data was not listed for any….....

Show More ⇣

     Open the full completed essay and source list


OR

     Order a one-of-a-kind custom essay on this topic


sample essay writing service

Cite This Resource:

Latest APA Format (6th edition)

Copy Reference
"Cardsmax The Accounting And Auditing Enforcement Release" (2011, September 10) Retrieved May 23, 2025, from
https://www.aceyourpaper.com/essays/cardsmax-accounting-auditing-enforcement-117402

Latest MLA Format (8th edition)

Copy Reference
"Cardsmax The Accounting And Auditing Enforcement Release" 10 September 2011. Web.23 May. 2025. <
https://www.aceyourpaper.com/essays/cardsmax-accounting-auditing-enforcement-117402>

Latest Chicago Format (16th edition)

Copy Reference
"Cardsmax The Accounting And Auditing Enforcement Release", 10 September 2011, Accessed.23 May. 2025,
https://www.aceyourpaper.com/essays/cardsmax-accounting-auditing-enforcement-117402
   

Open, View, and/or
Download this Document
order custom essay example