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WASHINGTON--A former Price Waterhouse partner accused of improper audit practices and the PW audit manager who failed to flag that misconduct have both been singled out for discipline by the Securities Exchange Commission.
In suspending both CPAs from SEC practice, the Commission directed its strongest criticism at K. Clark Childers, a partner at PW's Washington, D.C. office from 1984 to 1990.
The agency's charges were prompted by the accounting firm's audit of the 1989 financial statements of Star Technologies, Inc.--a publicly-held manufacturer of scientific computers. Childers, who issued an unqualified opinion on those statements, bowed to pressure from the client for "arbitrary compromise adjustments that were improper and not in conformity with Generally Accepted Accounting Principles,' the SEC charged.
The agency said Childers agreed to improper recording of research and development expenditures as an asset rather than an expense; failure to write-down or provide an adequate reserve for obsolete inventory; failure...