Investview’s former accountant fined $400,000 over audits

Investview’s former accounts have been fined $400,000 for filing dodgy audits with the SEC.

One individual accountant has also been fined $65,000 and barred from being associated with a registered public accounting firm.

The Public Company Accounting Oversight Board (PCOAB), fined Haynie & Company as per a
January 23th order
.

The Investview audits in question date back to 2019.

On the 2019 Investview Audit, the Firm violated PCAOB rules and standards by failing to obtain sufficient appropriate audit evidence concerning:

(1) Investview’s accounting for its acquisition of United Games, LLC and United League, LLC (collectively, “United Games”);

(2) Investview’s cryptocurrency mining revenue; and

(3) a license agreement held by Investview.

United Games
was a failed MLM company
acquired by Investview
in 2018.

Auditing issues related to the acquisition pertain to Haynie and Company failing to have properly evaluated Investview’s valuation of United Games.

According to its public filings, Investview estimated the valuation of the intangible assets it acquired from United Games at approximately $1.8 million, and the Investview shares used as consideration at approximately $800,000, resulting in a one-time gain of approximately $971,000 recorded in earnings in 2019.

Investview used a third-party valuation firm (the “Third-Party Specialist”), to support these fair value estimates.

The valuation reports prepared by the Third-Party Specialist relied on data and assumptions provided by Investview.

(Haynie and Company) failed to test the projections that Investview provided to the Third-Party Specialist.

Haynie failed to evaluate whether the United Games acquisition was presented fairly, in all material respects, in conformity with the applicable financial reporting framework.

With respect to Investview’s cryptocurrency mining revenue, which at the time was run through Kuvera Global, PCOAB writes;

Investview reported net cryptocurrency mining revenue of approximately $1.94 million for the fiscal year ended March 31, 2019.

Haynie identified improper revenue recognition as a significant risk and a fraud risk.

Haynie failed to obtain sufficient appropriate audit evidence related to Investview’s cryptocurrency mining revenue, because the Firm

(1) failed to evaluate whether Investview’s cryptocurrency mining revenue recognition approach was presented in conformity with ASC 606, which Investview adopted at the beginning of the 2019 fiscal year; and

(2) failed to perform detailed testing of a $3.83 million component of cryptocurrency mining net revenue representing the amounts Investview paid to its cryptocurrency mining supplier.

Long story short, Investview misreported how much it paid its mining supplier. Haynie and Company, despite identifying this section of Investview’s business as a “fraud risk”, failed to do any detailed assessment of Investview’s reporting.

As such, Investview got away with overreporting $370,000 it never paid to i

🤖 Quick Answer

What violations did Haynie & Company commit in the 2019 Investview audit?

Who imposed the fine on Investview's former accountant?
The Public Company Accounting Oversight Board (PCAOB) imposed the fine on Haynie & Company through an order issued on January 23rd, establishing penalties for inadequate audit procedures.

What penalties were assessed against the accounting firm and individual accountant?
Haynie & Company was fined $400,000, while one individual accountant received a $65,000 fine and was barred from association with any registered public accounting firm.

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