A Texas accountant has been billed with accomplishing an audit for a public company even nevertheless his business was not registered with the Public Business Accounting Oversight Board.

The U.S. Securities and Trade explained Christopher Knauth’s fiscal 2018 audit of tech business Zenergy Brands — the initial he experienced ever performed for a public company — also unsuccessful to comply with numerous PCAOB auditing standards.

Plano, Texas-primarily based Zenergy, a developer of vitality-conservation products and solutions and providers, filed for Chapter eleven personal bankruptcy in October 2019.

“As gatekeepers, auditors execute a important function in maintaining investor self-confidence in issuers’ financial statements.  Registration with the PCAOB and compliance with PCAOB auditing standards are critical to this gatekeeping perform,” Carolyn Welshhans, affiliate director of the SEC’s Division of Enforcement, explained in a news launch.

Public corporations are needed to file experiences with the fee that have been audited by an unbiased public accountant registered with the PCAOB.

Knauth co-launched Evans & Knauth in October 2017 but in accordance to the SEC, it was not registered with the PCAOB when Zenergy hired the business in June 2018 and Knauth unsuccessful to complete a registration by the time he executed the audit.

“The audit report signed by [Evans & Knauth], as a result of Knauth, falsely stated that ‘[w]e are a public accounting business registered with the [PCAOB],’” the SEC explained in an purchase instituting administrative proceedings.

The work Knauth performed on the audit and quarterly critiques for Zenergy allegedly unsuccessful to comply with PCAOB standards simply because, amongst other matters, he unsuccessful to adequately program the audit and determine and evaluate hazards of content misstatement, work out thanks professional care and professional skepticism, attain ample correct audit evidence, and prepare satisfactory audit documentation.

“It seems from the current documentation that Knauth merely attained selected restricted documents from [Zenergy] and did not execute more investigation ample to determine and correctly evaluate the hazards of content misstatement or work out ample professional skepticism, like by conducting more questioning,” the SEC explained.

Corporation documents display Evans & Knauth was dissolved in September 2020.

Christopher Knauth, PCAOB, U.S. Securities and Trade Commission, Zenergy Brands