IN THE MATTER OF CHOI DOW IAN HONG & LEE ACCOUNTANCY
The U.S. SEC charged Choi Dow Ian Hong & Lee Accountancy Corporation and its partner Ernest E. Dow, CPA, with willfully violating Section 102(a) of the Sarbanes-Oxley Act by issuing a 2004 audit report for a public company without PCAOB registration, leading to administrative proceedings seeking potential censure or permanent ban from practicing before the Commission.
The U.S. Securities and Exchange Commission initiated administrative proceedings against Choi Dow Ian Hong & Lee Accountancy Corporation and Ernest E. Dow, CPA, for issuing an audit report on a public company’s 2004 financial statements without being registered with the Public Company Accounting Oversight Board (PCAOB), as required by Section 102(a) of the Sarbanes-Oxley Act since October 22, 2003. The SEC alleged that this conduct constituted a willful violation and rendered the firm and its partner unqualified to represent others before the Commission. No financial misstatements or monetary fraud were alleged; the charges focused solely on regulatory non-compliance under Section 4C of the Securities Exchange Act and Rule 102(e), with potential sanctions including censure or permanent denial of practice privileges.
The U.S. Securities and Exchange Commission (SEC) filed an administrative order against Choi Dow Ian Hong & Lee Accountancy Corporation and its partner, Ernest E. Dow, CPA, for violating Section 102(a) of the Sarbanes-Oxley Act by preparing and issuing an audit report on a public company’s 2004 financial statements without being registered with the Public Company Accounting Oversight Board (PCAOB), a requirement that took effect on October 22, 2003. The SEC alleged that this act was willful and rendered both the firm and Dow unqualified to practice before the Commission, as only PCAOB-registered firms may issue audit reports for public companies. No allegations of financial fraud, misstatement, or monetary loss were included—the charges were strictly procedural and regulatory in nature. The SEC invoked Section 4C of the Securities Exchange Act and Rule 102(e) of its Rules of Practice to initiate proceedings seeking potential censure or permanent bar from appearing or practicing before the Commission. A hearing was scheduled before an administrative law judge to determine the validity of the allegations and appropriate sanctions, with an initial decision required within 300 days of service. The case underscored the SEC’s enforcement of PCAOB registration mandates as a foundational element of audit integrity under Sarbanes-Oxley. Neither the firm nor Dow admitted guilt, and the outcome hinged on whether they could contest the willfulness of their non-compliance.
Extracted insights
- person administrative law judge
- company choi dow ian hong & lee accountancy corporation
- person ernest e. dow
- agency Securities and Exchange Commission
- Securities And Exchange Commission announced issuance of an Order Instituting Administrative Proceedings
- Choi Dow Ian Hong & Lee Accountancy Corporation prepared and issued an audit report on the financial statements of a public company in 2004
- Ernest E. Dow participated in the preparation and issuance of an audit report
- Sarbanes-Oxley Act prohibits accounting firms not registered with the Public Company Accounting Oversight Board from preparing or issuing audit reports
- Choi Dow Ian Hong & Lee Accountancy Corporation willfully violated Section 102(a) of the Sarbanes-Oxley Act
- Securities And Exchange Commission institutes proceedings against Choi Dow Ian Hong & Lee Accountancy Corporation and Ernest E. Dow
- Administrative Law Judge directed to issue an initial decision no later than 300 days from the date of service
U.S. SECURITIES AND EXCHANGE COMMISSION Washington, D.C. SECURITIES EXCHANGE ACT OF 1934 Release No. 56429 / September 13, 2007 ACCOUNTING AND AUDITING ENFORCEMENT Release No. 2709 / September 13, 2007 ADMINISTRATIVE PROCEEDING File No.3-12790 IN THE MATTER OF CHOI DOW IAN HONG & LEE ACCOUNTANCY CORPORATION AND ERNEST E. DOW, CPA The United States Securities and Exchange Commission (Commission) announced the issuance of an Order Instituting Administrative Proceedings Pursuant to Section 4C of the Securities Exchange Act of 1934 and Rule 102(e) of the Commission’s Rules of Practice (Order) against Choi Dow Ian Hong & Lee Accountancy Corporation (Choi Dow) and Ernest E. Dow, CPA (Dow). The Order alleges that Choi Dow prepared and issued and Dow participated in the preparation and issuance of an audit report on the financial statements of a public company in 2004, without first registering with the Public Company Accounting Oversight Board (Board). Section 102(a) of the Sarbanes-Oxley Act of 2002 (Sarbanes-Oxley Act) prohibits accounting firms not registered with the Board from preparing or issuing audit reports with respect to any issuer after October 22, 2003. The Order alleges that, by this conduct, Choi Dow and Dow lacked the requisite qualifications to represent others and that Choi Dow willfully violated Section 102(a) of the Sarbanes-Oxley Act. Based on the above, the Order institutes proceedings against Choi Dow and Dow pursuant to Section 4C(a)(1) of the Securities Exchange Act of 1934 (Exchange Act) and Rule 102(e)(1)(i) of the Commission’s Rules of Practice, and additionally as to Choi Dow, Section 4C(a)(3) of the Exchange Act and Rule 102(e)(1)(iii) of the Commission’s Rules of Practice, to determine whether the allegations in the Order are true, and whether they should be censured or temporarily or permanently denied the privilege of appearing or practicing before the Commission as an accountant. A hearing will be scheduled before an administrative law judge to determine whether the allegations in the Order are true, to provide Choi Dow and Dow an opportunity to dispute these allegations, and to determine what sanctions, if any, are appropriate. The Order directs the Administrative Law Judge to issue an initial decision in this matter no later than 300 days from the date of service of the Order.
U.S. SECURITIES AND EXCHANGE COMMISSION Washington, D.C. SECURITIES EXCHANGE ACT OF 1934 Release No. 56429 / September 13, 2007 ACCOUNTING AND AUDITING ENFORCEMENT Release No. 2709 / September 13, 2007 ADMINISTRATIVE PROCEEDING File No.3-12790 IN THE MATTER OF CHOI DOW IAN HONG & LEE ACCOUNTANCY CORPORATION AND ERNEST E. DOW, CPA The United States Securities and Exchange Commission (Commission) announced the issuance of an Order Instituting Administrative Proceedings Pursuant to Section 4C of the Securities Exchange Act of 1934 and Rule 102(e) of the Commission’s Rules of Practice (Order) against Choi Dow Ian Hong & Lee Accountancy Corporation (Choi Dow) and Ernest E. Dow, CPA (Dow). The Order alleges that Choi Dow prepared and issued and Dow participated in the preparation and issuance of an audit report on the financial statements of a public company in 2004, without first registering with the Public Company Accounting Oversight Board (Board). Section 102(a) of the Sarbanes-Oxley Act of 2002 (Sarbanes-Oxley Act) prohibits accounting firms not registered with the Board from preparing or issuing audit reports with respect to any issuer after October 22, 2003. The Order alleges that, by this conduct, Choi Dow and Dow lacked the requisite qualifications to represent others and that Choi Dow willfully violated Section 102(a) of the Sarbanes-Oxley Act. Based on the above, the Order institutes proceedings against Choi Dow and Dow pursuant to Section 4C(a)(1) of the Securities Exchange Act of 1934 (Exchange Act) and Rule 102(e)(1)(i) of the Commission’s Rules of Practice, and additionally as to Choi Dow, Section 4C(a)(3) of the Exchange Act and Rule 102(e)(1)(iii) of the Commission’s Rules of Practice, to determine whether the allegations in the Order are true, and whether they should be censured or temporarily or permanently denied the privilege of appearing or practicing before the Commission as an accountant. A hearing will be scheduled before an administrative law judge to determine whether the allegations in the Order are true, to provide Choi Dow and Dow an opportunity to dispute these allegations, and to determine what sanctions, if any, are appropriate. The Order directs the Administrative Law Judge to issue an initial decision in this matter no later than 300 days from the date of service of the Order.