PCAOB Bars Audit Partner and Fines Fruci and Associates After Audit Failures

The Public Company Accounting Oversight Board just sent a loud message to small audit firms. Sign off on work you did not do and you are out. Skip quality controls and you pay for it. That is exactly what happened to Jennifer Crofoot and Fruci and Associates after multiple botched public company audits.

What Went Wrong in the Audits

Jennifer Crofoot served as engagement partner on audits for four public companies including Clean Vision Hammer Fiber Optics LeeWay Services and Zeuus. Across those engagements she issued clean audit opinions without performing required audit procedures on key accounts.

According to the PCAOB she failed to obtain sufficient audit evidence and showed little to no professional skepticism. Despite that she signed unqualified audit reports that were released to investors.

Even more basic rules were ignored. Crofoot issued audit reports without the required engagement quality review approval. That is a hard stop under PCAOB standards and not optional.

Fruci and Associates eventually terminated her once the issues came to light but the audits had already been issued.

How Fruci and Associates Let It Happen

The PCAOB did not just fault the individual auditor. It also cited serious firm level quality control failures at Fruci & Associates.

The firm lacked effective controls to ensure audit documentation was finalized within the required 45 day window. That gap allowed Crofoot to backdate audit work and bypass documentation rules.

The firm also failed to enforce engagement quality reviews. There was no reliable system to confirm reviews were completed before audit reports were issued. In multiple cases reports went out without required approvals.

In short the firm had policies on paper but not in practice. That opened the door for repeated violations across several audits.

The Penalties and What They Mean

The PCAOB censured Jennifer Crofoot and imposed a three year bar from associating with PCAOB registered firms. She can apply for reinstatement only after completing at least 40 hours of PCAOB approved training.

Crofoot was not fined due to financial hardship.

Fruci and Associates was censured and fined $50,000. The firm must also take remedial steps to strengthen its quality control system. The PCAOB noted the firm received cooperation credit which helped reduce the penalty.

Why This Case Matters to Audit Firms

This case is a reminder that audit failures rarely live in isolation. Weak firm controls make individual misconduct easier and more costly when it surfaces.

Small and midsize audit firms should take note. Documentation deadlines engagement quality reviews and report release controls are not administrative details. They are enforcement priorities.