Clerks at ABS Industries Agree to Cease-and-Desist in Accounting Fraud Case

Respondents were employed as an accounts receivable clerk and an inventory clerk/production control manager, respectively, at a subsidiary of ABS Industries, Inc. At their superiors’ direction, they allegedly participated in accounting fraud defrauding investors in the company’s stock by intentionally overstating revenues by millions of dollars in 1994 and the first three quarters of the 1995. The scheme was carried out by improperly recording purported “bill and hold” sales at ABS Industries, resulting in overstated accounts receivables, sales, pre-tax income, net income and earnings per share.