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By Mark Maurer
The Public Company Accounting Oversight Board on Tuesday said it fined accounting firm BDO USA and two of its partners a total of more than $2 million over violations of audit rules in connection with the 2017 audit of AAC Holdings, the operator of substance-abuse treatment company American Addiction Centers.
BDO and partner Kevin Olvera failed to properly assess three significant estimates that AAC used to value nearly all of its client-related revenue and accounts receivable, the U.S. auditing watchdog said. Another partner, Michael Musick, failed to exercise due professional care when conducting a quality review of the audit, the PCAOB said.
Tennessee-based AAC was delisted from the New York Stock Exchange in 2019. The company filed for bankruptcy protection in 2020.
BDO, Olvera and Musick didn’t admit to or deny the PCAOB’s findings. BDO agreed to pay $2 million. Olvera will have to pay $35,000 and limit his role on audits for a one-year period, whereas Musick was ordered to pay $25,000.
A BDO spokeswoman said the firm remains dedicated to performing audits in accordance with professional standards. “At BDO, we adhere to the highest standards of excellence across all areas of our business and fully support the PCAOB’s goal of protecting investors and furthering the public interest,” the spokeswoman said.
Write to Mark Maurer at [email protected]
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