The SEC on July 1 charged Michael Rand, the former chief accounting officer of Atlanta-based homebuilder Beazer Homes, USA, for conducting a multi-year fraudulent earnings management scheme to meet analysts’ expectations, and for misleading auditors to conceal his activity.
The SEC alleges that Rand fraudulently decreased Beazer’s reported net income by recording improper accounting reserves during certain periods between 2000 and 2005 in order to meet or exceed analysts’ expectations for Beazer’s diluted earnings per share and maximize yearly officer and senior employee bonuses. Rand began reversing these improper reserves beginning in the first quarter of fiscal year 2006 in order to offset Beazer’s declining financial performance.
