The Public Company Accounting Oversight Board announced sanctions on Jan. 13 against Southfield, MI-based accounting firm Zwick CPA, the firm’s owner Jack Zwick, and former audit manager Jeffrey Hoskow for an audit gone wrong.
The audit firm, Zwick, and Hoskow received the penalties for violating PCAOB rules and standards during the integrated audit of Genie Energy Ltd., a Newark, NJ-based energy services provider, for the year ended Dec. 31, 2022.
According to the PCAOB’s disciplinary order for the firm and Zwick, who served as the engagement partner, they failed in the following areas while performing the Genie audit:
- Properly plan, identify, and assess the risks of material misstatement;
- Obtain sufficient appropriate audit evidence to support the accounting firm’s opinion on internal control over financial reporting;
- Obtain sufficient appropriate audit evidence as to Genie’s reported revenue and unbilled revenue; and
- Prepare audit documentation pursuant to PCAOB standards.
Zwick also failed to properly supervise the work of the firm’s engagement team members, the PCAOB said.
Hoskow, who was an audit manager at Zwick CPA, violated PCAOB rules and standards by improperly adopting workpapers from Genie’s predecessor auditor as the firm’s own. Specifically:
- Hoskow took the predecessor auditor’s workpapers, replaced the name of the predecessor auditor with “Zwick CPA,” updated the year under audit, and added workpaper sign-offs.
- Hoskow also prepared various other significant workpapers that inappropriately included documentation related to other issuers—documentation that was inaccurate and irrelevant to Genie’s operations.
Hoskow’s disciplinary order states:
Shortly before the documentation completion date, Hoskow, who had access to the predecessor auditor’s work papers for the prior year audit, took those work papers, replaced the name of the predecessor auditor with “Zwick CPA,” updated the year under audit, and added work paper sign-offs.
Hoskow did so even when the documentation reflected events that had occurred in the prior year (2021), not the year under audit (2022). For example, in one ICFR work paper, Hoskow replaced the year “2021” with “2022,” so that the work paper reads: “In 2022, [Genie] changed their Tax Specialist to [Entity A] instead of [Entity B]. Further this year due to the UK being reported as discontinued operations, [Genie] noted that the complex provision calculation need expertise on UK tax laws and [Genie] outsourced UK provision and calculation to the 3rd party … .” However, both of the documented events—the change in Tax Specialists and the discontinuance of Genie’s UK operations—actually occurred in 2021, the year before the one the Firm was engaged to audit.
In addition, Hoskow prepared various other significant work papers related to audit planning and evaluating audit results that inappropriately included documentation related to other issuers—documentation that was inaccurate and irrelevant to Genie’s operations.
As a result of Hoskow’s conduct, the Firm’s audit documentation was insufficient to enable an experienced auditor with no previous connection with the engagement to understand the nature, timing, extent, and results of the procedures performed, evidence obtained, and conclusions reached.
Zwick CPA and Jack Zwick received the following sanctions:
- Censure;
- The firm’s registration was revoked (with the ability to reapply for registration after three years from the date of the order);
- Zwick was barred from being an associated person of a registered public accounting firm (with the ability to file a petition for PCAOB consent to associate with a registered public accounting firm after three years from the date of the order);
- Pay a $50,000 total fine;
- The firm is required to undertake certain remedial measures concerning quality control prior to submitting any future registration application and to provide evidence of such measures with any future registration application; and
- Zwick must complete 40 hours of continuing professional education relating to PCAOB auditing standards, in addition to any CPE required in connection with any professional license, before filing any petition for board consent to associate with a registered public accounting firm.
Hoskow was censured, barred from being an associated person of a registered public accounting firm (with the ability to file a petition for PCAOB consent to associate with a registered public accounting firm after two years from the date of the order), and is required to complete 40 hours of CPE relating to PCAOB auditing standards, in addition to any CPE required in connection with any professional license, before filing any petition for board consent to associate with a registered public accounting firm.
He doesn’t have to pay a monetary penalty, according to his settled disciplinary order.
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Tags: Accounting, audit, Auditing, auditing standards, PCAOB, PCAOB enforcement
Julie Zhu January 15 2026 at 6:40 am
Great enforcement action. Thank you! We need to ensure quality control measures in everything we do as a professional.