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Compliance Hotline

By ALM Staff | Law Journal Newsletters |
October 01, 2003

Audit Leads to Accountant's Arrest

In one of the first prosecutions under the Sarbanes-Oxley Act, a former Ernst & Young partner has been charged with obstructing an investigation into a failed dot-com. The defendant is charged with altering documents relating to the firm's audits to provide a better basis for the accounting firm's conclusions about the now bankrupt technology company's financial health. One of the counts relates to the alteration of the documents. The other concerns representations about the documents made earlier this year to federal regulators. That is what triggered the charge under the Act.

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