Wild news from the auditing world this weekend: regulators have suspended an audit firm in Colorado for fabricating its work with clients. Hundreds of businesses — including for Donald Trump’s newly public Truth Social — must now scramble to find new audit firms and re-perform prior audit work.

The audit firm in question is BF Borgers, along with its sole owner and engagement partner, Benjamin F. Borgers. On Friday the Securities and Exchange Commission charged both the man and the firm with “deliberate and systemic failure” to follow industry audit standards for more than 1,500 regulatory filings that Borgers reviewed from January 2021 through June 2023.

According to the SEC, Borges simply took clients’ old audit workpapers, scribbled a new date across the top, and passed off those doctored pages as fresh work. Borges agreed to pay a total of $14 million ($12 million for the firm, $2 million for Borges personally) and never to practice before the SEC again.

The practical upshot is that 350 businesses that used Borges as their auditor (mostly small-cap companies, with some broker-dealers in the mix too) are up the creek. They must find a new audit firm immediately and re-perform previous audit work done by Borges to see whether that work is worth the paper it’s printed on, which it probably isn’t.

For the curious, we did compile a list of filers that used Borges as their auditor in 2022. We couldn’t use 2023 filings because not all filings for last year have arrived yet, particularly the small public companies that Borges typically handled as clients. (The firm’s most famous client, Trump Media & Technology Group ($DJT) only went public in March of this year, so it is not on that 2022 list either.)

As for those companies now left high and dry — they are likely to be in for a tough few months. Numerous smaller audit firms have quit handling public-company clients because the jobs are too complex, so finding a replacement for Borges is not likely to be easy. Then that new audit firm will need to sift through Borges’ prior work, and that won’t be cheap. What a headache.

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