The accounting firm picked to audit Donald Trump’s social media venture has had repeated run-ins with regulators and faced criticism for its failure to live up to professional standards in the US and Canada, according to a review of public filings.
BF Borgers has become one of the most prolific auditors of US public companies just 15 years after its foundation, and regulators have warned that it has taken on new clients faster than it can manage.
The Colorado firm, set up in 2009 by former IT consultant and Jeep enthusiast Ben Borgers, was thrust into the spotlight this week when its audit report on Trump Media & Technology Group flagged that the newly listed social media group could run out of money within a year.
TMTG, parent company of the social network Truth Social, has immediately become BF Borgers’ highest-profile client, but it is just one of more than 170 US public companies the firm has taken on during a short history dogged by criticism over the quality of its work. It is now the eighth largest audit firm in the country by number of clients, while still operating out of a single-storey office building in Lakewood, with just 50 staff, only 10 of whom are certified public accountants, according to its latest regulatory filing.
The firm has targeted small- and microcap companies unable or unwilling to pay the higher rates charged by larger rivals, and appears to have kept its fees low by piling work on to its founder in particular. Ben Borgers is now the most prolific individual auditor of US public companies, personally signing 143 public company audit opinions in the past year, according to the research firm Ideagen Audit Analytics, five times more than any other US accountant.
“The firm significantly increased its number of issuer audit clients . . . without a corresponding increase in the number of firm partners,” the Public Company Accounting Oversight Board, the US audit regulator, wrote in a stinging report in 2022. The PCAOB criticised the “tone at the top” of the firm and said Borgers’ management “lacks the necessary commitment to undertake only those engagements that it can reasonably expect will be completed with professional competence”.
The report concluded: “Leadership does not appear to be sufficiently balancing firm growth with ensuring audit quality.”
BF Borgers did not respond to a request for comment.
Ben Borgers set out his more than 15-year experience in public accounting in a biography on his firm’s website, which says he began his career as a database administrator before getting a second degree in accounting. He set up his own firm after short stints at Grant Thornton and a regional accounting firm based in Colorado, initially focusing on tax work before shifting into public company audits.
“In his free time, Ben enjoys Jeeping in his CJ-7 that he built from scratch, horseback riding, backpacking, fishing, camping, hunting, sailing, hiking and spending time with his wife and three children,” the biography concludes.
TMTG hired BF Borgers as its auditor in 2022 and the firm signed off on two sets of annual accounts which were included in regulatory filings after TMTG finally went public last month via a merger with a shell company.
TMTG’s popularity with retail investors and traders — including fans of the former US president — sent the lossmaking company’s valuation rocketing to about $14bn before the shares fell back in recent days.
Every public company is required to have its financial statements signed off by a regulated auditor, who acts as a check against mistakes or outright fraud, with the aim of instilling confidence in financial markets. Auditors are also required to give their judgment on whether a company remains a “going concern”, or is at risk of running out of money — the issue that caught the headlines regarding TMTG.
“Not all auditors, and not all audits, are created equal,” said Sandy Peters, head of global advocacy at the CFA Institute, a professional body for investors, who is also an adviser to the PCAOB. The regulator has been urging investors to pay closer attention to evidence from its inspection reports. “The quality of the audit is important,” Peters said.
BF Borgers’ inspection record is among the worst of the hundreds of audit firms overseen by the PCAOB, showing a 100 per cent deficiency rate in each of the past two years. Examiners found flaws in 21 of the 21 audits they sampled, including failures to properly check accounts and to test accounting policies.
The regulator has also barred two separate BF Borgers audit directors from doing work on US public companies in the past five years, each time for breaches of US auditing standards.
The PCAOB is not the only regulator to have raised issues with BF Borgers’ work. Last month, the Colorado State Board of Accountancy fined Ben Borgers $5,000 and issued a “letter of admonition” after ruling that he had failed to conduct retirement plan audits with “due care”. In December, Canada’s audit regulator banned BF Borgers from taking on new clients north of the border after finding 19 violations of professional standards in its audits of Canadian companies.
Asked for comment on its choice of auditor, TMTG said: “With stories like this preemptively attacking our auditors before they’ve even begun their work for us as a public company, it’s unclear why anyone but the most partisan leftwing activists would ever read the Financial Times.”