The U.S. Securities and Exchange Commission (SEC) has charged London-based audit firm, Crowe U.K. LLP, its CEO, Nigel Bostock, and senior auditor, Matthew Stallabrass, concerning their deficient audit of the music streaming company, Akazoo Limited. The parties involved have agreed to settle the SEC’s charges.
In the SEC’s order, it was revealed that Crowe U.K. had issued a clean audit report for Akazoo’s 2018 financial statements. However, post Akazoo’s public listing in September 2019 through a merger with a special purpose acquisition company (De-SPAC transaction), it came to light that Akazoo’s 2018 financial statements had inaccurately reported $120 million in revenue, while in reality, the company had only negligible revenue amounts.
The SEC order further highlighted that Crowe U.K. had claimed its 2018 audit was in line with Public Company Accounting Oversight Board (PCAOB) standards. Contrarily, the Akazoo audit team at…
