The Securities and Exchange Commission suspended three former accountants from BDO USA LLP for improperly backdating the work papers of AmTrust Financial Services, a publicly traded insurance company, during a 2013 audit.

The SEC found that BDO fell behind schedule while conducting an audit in 2013 of AmTrust and didn’t complete the necessary audit procedures in time to meet AmTrust’s deadline to file its annual report with the SEC. To make it appear as if BDO’s audit had been completed, the senior manager on the audit engagement, Lev Nagdimov, instructed BDO’s audit team to sign off on all the work papers and audit programs, whether or not the work was done. Nagdimov also told BDO’s audit team to load and sign blank or placeholder work papers in BDO’s electronic files. In obeying his instructions, the BDO audit team improperly “predated” audit documentation by signing blank or incomplete work papers and audit programs, according to the SEC.

After AmTrust filed its 2013 annual report, the audit team completed the necessary audit procedures and preserved the predated sign-offs in BDO’s electronic files by overwriting some of the existing documentation in the placeholder work papers. However, SEC investigators asked BDO to produce an earlier snapshot of its work papers from the period when the “predated” documents were in place. The SEC was then able to detect the audit deficiencies and predated work papers by comparing BDO’s final, archived work papers with the snapshot of the work papers as they existed at the time that BDO released its audit report.

BDO denied involvement with the matter. “BDO is not a party to this settlement, which concerns three former professionals’ actions in connection with a 2013 audit,” a representative for the firm said in a statement emailed to Accounting Today. “BDO takes these matters very seriously and has cooperated fully with the SEC on this matter.”

Nagdimov did not immediately respond to a request for comment. The SEC also blamed two other former BDO partners, saying that if engagement partner Richard J. Bertuglia and engagement quality review partner John W. Green had properly exercised due professional care, they would have noticed the audit deficiencies before releasing BDO’s audit report, which gave unqualified opinions on AmTrust’s 2013 financial statements and internal control over financial reporting. Green did not immediately respond to a request for comment and Bertuglia could not be reached.

“Auditors are entrusted with significant responsibility when auditing public companies,” said Shamoil Shipchandler, director of the SEC’s Fort Worth Regional Office, in a statement. “Public accountants who manipulate their files to conceal audit deficiencies represent a serious breach of those professional obligations, and the commission will impose suspensions to protect investors.”

Without admitting or denying the findings in the SEC’s order, the three former BDO auditors agreed to be suspended from appearing and practicing before the SEC as accountants, which includes not participating in the financial reporting or audits of public companies. The SEC is allowing Nagdimov to apply for reinstatement after five years, Bertuglia after three years and Green after one year.