Securities Law Prof Blog

Editor: Eric C. Chaffee
Univ. of Toledo College of Law

Monday, February 11, 2008

SEC Settles Rule 102(e) Proceeding Against Take-Two's Audit Partner

The SEC settled a Rule 102(e) administrative proceeding against Robert A. Fish, CPA (Fish), the former PricewaterhouseCoopers (PwC) audit engagement partner responsible for the fiscal year end 2000 audit of video game publisher and distributor Take-Two Interactive Software, Inc. (Take-Two).  The Order finds that Fish failed to exercise due professional care during the 2000 audit.  Take-Two fraudulently inflated its revenues and after-tax earnings by arranging with several distributors to "park" several hundred thousand computer and video game units at or near the end of fiscal quarters or the fiscal year.   In addition, Fish failed to test the adequacy of Take-Two's 5% reserve for estimated sales returns at October 31, 2000 as required by GAAS. The Order finds that Fish engaged in improper professional conduct pursuant to Rule 102(e)(1)(ii) of the Commission's Rules of Practice.  Fish consented to the issuance of the Order without admitting or denying the findings contained therein.

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