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SEC-RPT-Panel

 
 
 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   
 
 
 
 
 
 
 
 
  
UNITED STATES OF AMERICA 
 Before the 
 SECURITIES AND EXCHANGE COMMISSION 
SECURITIES EXCHANGE ACT OF 1934 
Release No. 63740 / January 20, 2011 
ACCOUNTING AND AUDITING ENFORCEMENT 
Release No. 3232 / January 20, 2011 
ADMINISTRATIVE PROCEEDING 
File No. 3-13997 
In the Matter of 
DOHAN + COMPANY CPAs, 
STEVEN H. DOHAN, CPA, 
NANCY L. BROWN, CPA, and 
EREZ BAHAR, CA, 
Respondents. 
ORDER MAKING FINDINGS AND 
IMPOSING REMEDIAL SANCTIONS 
PURSUANT TO SECTION 4C OF THE 
SECURITIES EXCHANGE ACT OF 1934 
AND RULE 102(e) OF THE COMMISSION’S 
RULES OF PRACTICE AS TO DOHAN + 
COMPANY CPAS, STEVEN H. DOHAN, 
CPA, AND NANCY L. BROWN, CPA 
I. 
In these proceedings, instituted on August 9, 2010 pursuant to Section 4C of the Securities 
Exchange Act of 1934 (“Exchange Act”) and Rule 102(e)(1)(ii) of the Securities and Exchange 
Commission’s (“Commission”) Rules of Practice, Respondents Dohan + Company CPAs (“Dohan 
+ Co.”), Steven H. Dohan (“Dohan”), and Nancy L. Brown (“Brown”) (collectively 
“Respondents”) have submitted Offers of Settlement (“Offer”) which the Commission has 
determined to accept. 
II. 
Solely for the purpose of these proceedings and any other proceedings brought by or on 
behalf of the Commission, or to which the Commission is a party, and without admitting or 
denying the findings herein, except as to the Commission’s jurisdiction over them and the subject 
matter of these proceedings, which are admitted, Respondents consent to the entry of this Order 
Making Findings and Imposing Remedial Sanctions Pursuant to Section 4C of the Securities 
  
 
 
 
 
 
 
 
 
  
 
 
 
 
  
 
 
 
 
 
 
                                                 
  
  
Exchange Act of 1934 and Rule 102(e) of the Commission’s Rules of Practice as to Dohan + 
Company CPAs, Steven H. Dohan, CPA, and Nancy L. Brown, CPA (“Order”), as set forth below. 
III. 
On the basis of this Order and the Offers of Respondents Dohan + Co., Dohan, and Brown, 
the Commission finds1 that: 
A. SUMMARY 
1. These proceedings arise out of Respondents’ improper professional conduct during 
their audit of International Commercial Television, Inc.’s (“ICTV”) 2007 financial statements.  
During fiscal year 2007, ICTV improperly recognized revenue and incorrectly recorded product 
returns, resulting in a material overstatement of revenue and net income.  Respondents’ audit of 
ICTV’s 2007 financial statements failed to comply with numerous Public Company Accounting 
Oversight Board (“PCAOB”) auditing standards.  These included failing to demonstrate the 
required level of proficiency, failing to exercise due care and professional skepticism, failing to 
obtain sufficient evidential matter, failing to plan the audit, and failing to supervise the audit staff. 
As a result, Respondents Dohan and Brown and others caused Respondent Dohan + Co. to issue an 
unqualified audit report for ICTV’s 2007 Form 10-K/SB that incorrectly stated that the audit had 
been conducted in accordance with the PCAOB’s auditing standards and that ICTV’s financial 
statements were fairly reported in conformity with Generally Accepted Accounting Principles 
(“GAAP”).  Respondents’ conduct, as further described below, constituted improper professional 
conduct within the meaning of Rule 102(e)(1)(ii) and (iv) and Section 4C of the Exchange Act. 
B. RESPONDENTS 
2. Dohan + Company CPAs is an accounting and auditing firm based in Miami, 
Florida. The firm provides services to public companies registered with the Commission and has 
been registered with the PCAOB since October 2003.  The firm conducted audits of ICTV’s 
financial statements for the years ended 2004, 2005, 2006, and 2007.  As auditor, Dohan + Co. 
issued a report stating that ICTV’s financial statements were prepared in conformity with GAAP 
and that Dohan + Co. had conducted audits in accordance with the PCAOB’s standards. 
3. Steven H. Dohan, CPA, age 63, is a resident of Miami, Florida.  Dohan is the 
founder and managing director of Dohan + Co. and was the concurring partner on the ICTV audits 
and quarterly reviews during the relevant period.  Dohan is a Certified Public Accountant licensed 
in Florida. 
4. Nancy L. Brown, CPA, age 58, is a resident of Miami, Florida.  Until recently, 
Brown was a director at Dohan + Co. and was the engagement partner on the ICTV audits and 
quarterly reviews during the relevant period.  Brown is a Certified Public Accountant licensed in 
Florida. 
1 The findings herein are made pursuant to Respondents’ Offers of Settlement and are not binding on any other 
person or entity in this or any other proceeding. 
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C. RELATED PARTY 
5. International Commercial Television, Inc. is a Nevada corporation headquartered 
in Bainbridge Island, Washington.  Founded in 2001, the Company sells health and beauty 
products internationally via infomercials and through various televised shopping networks.  
ICTV’s common stock is registered under Section 12(g) of the Exchange Act and is quoted on the 
Pink Sheets under the symbol “ICTL.” 
D. FACTS 
ICTV’s Improper Revenue Recognition 
6. ICTV is a marketer of consumer retail goods, specializing in “fountain of youth” 
health and beauty products it owns or holds the right to sell.  ICTV’s best-selling product is the 
Derma Wand, a skin care appliance that purportedly “reduces fine lines and wrinkles and improves 
overall skin appearance.” 
7. ICTV sells product through two main channels:  (1) direct sales to end users via 
infomercials produced by ICTV (“direct sales”), and (2) distribution through third-party 
distributors for sell-through to end users.  ICTV’s distributors include televised shopping networks 
such as the Home Shopping Network (“HSN”). 
8. Over a six-quarter period from early 2007 and continuing into 2008, ICTV 
improperly recognized revenue on sales through HSN.  In addition, ICTV failed to properly record 
revenue, and estimate and account for returns, for product sold through its direct sales channels. 
9. ICTV began selling product through HSN in 2007, predominantly through a “drop-
ship” contract entered into between ICTV and HSN in or about May 2007.  Under the drop-ship 
contract, HSN did not purchase the product itself, but instead facilitated sales to HSN’s customers 
(i.e., the end users). Generally, HSN sent ICTV written requests to pre-order product that would 
be sold during future HSN television broadcasts.  ICTV retained title to the product until HSN sold 
the product on-air to its customers and the product was shipped to the end users.  HSN did not 
guarantee the purchase of any product, and any unsold product remained under the ownership of 
ICTV. The contract also allowed HSN to return any product from its customers up to 60 days after 
delivery to the customer.2 
10. Despite these contractual provisions governing sell-through and right of return, 
ICTV recognized revenue in most cases upon HSN’s order of the product, before HSN sold 
through to its customers and before the right of return expired.  In some instances, ICTV also 
recognized revenue without a corresponding written request from HSN.  In those cases, ICTV 
booked HSN sales upon alleged confirmation from its third-party fulfillment warehouse that 
product had been physically segregated for HSN’s use. 
2 ICTV also sold product directly to HSN under the terms of a separate, “traditional” contract, in which HSN issued 
a purchase order, retrieved the product, sold the product to end users, and paid ICTV after the sell-through.  
However, only the first HSN sale was made per the terms of the traditional contract.  All other sales were made per 
the drop-ship arrangement. 
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11. ICTV failed to ensure that HSN sold through the units booked by the end of the 
quarter, resulting in a mounting accounts receivable balance with each successive HSN order.  This 
accounting treatment violated multiple revenue recognition criteria under Generally Accepted 
Accounting Principles (“GAAP”). 
12. In addition to prematurely recognizing revenue on sales through HSN, ICTV also 
booked revenue in 2007 on a product that failed an HSN quality control inspection and was never 
sold through HSN.  The purported sale remained on ICTV’s books through the 2007 audit and was 
not reversed until ICTV issued a restated Form 10-K/SB in March 2009. 
13. In total, ICTV booked seven HSN sales in 2007 totaling $2.8 million.  This figure 
was reported in ICTV’s trial balance and ultimately reported by ICTV in its 2007 Form 10-K.  
Respondents’ working papers state that the auditors tested the HSN sales and traced certain of the 
sales to ICTV’s sales journal, which in turn showed the amount that ICTV booked as revenue. 
14. Each HSN sale recognized for 2007 was improperly recognized, resulting in a 
material overstatement of revenue for ICTV’s fiscal 2007. 
15. ICTV also failed to properly record revenue on its direct sales.  ICTV provided its 
direct sales customers a 30-day free trial period whereby the customer could try the ordered 
product prior to purchase, and billed customers upon expiration of the 30-day period.  Despite this 
provision, ICTV recognized revenue upon shipment of the product, and before expiration of the 
trial period, in violation of GAAP.  ICTV also failed to properly estimate and record product 
returns on direct sales. 
16. Over the course of the six-quarter period, ICTV filed periodic reports with the 
Commission on Forms 10-Q and 10-K.  As a result of the improper accounting discussed above, 
ICTV reported materially inflated revenue and net income to investors and to the Commission. 
ICTV’s Restatement 
17. In October 2008, ICTV announced that it intended to restate its financial statements 
for the fiscal year ended 2007 and the first two quarters of 2008 as a result of improper revenue 
recognition. ICTV filed its restated Form 10-K/A for fiscal year 2007 on March 31, 2009.  The 
restatement resulted in a $1.4 million reduction in 2007 revenue related to the HSN errors, and an 
$840,000 reduction in 2007 revenue related to the failure to properly record direct sales returns. 
18. In March 2010, ICTV’s new outside auditors uncovered additional revenue 
recognition errors and ICTV reported that it intended to restate its previously-restated financial 
statements for the fiscal year ended 2007 and the first two quarters of 2008.  In April 2010, ICTV 
again restated its financial statements for the fiscal year ended 2007.  The restatement included an 
additional $550,000 revenue reduction related to the premature recognition of direct sales revenue 
prior to expiration of a free trial period. 
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19. The chart below shows that the errors were material to ICTV’s financial statements: 
Period Previously 
Reported Net 
Income 
Restated Net 
Income (Loss) 
Reduction to Reported Net 
Income 
FY 2007 $1,475,775 ($1,081,988) ($2,557,763) 
1Q 2008 $109,980 ($164,773) ($274,753) 
2Q 2008 $260,298 ($862,399) ($1,122,697) 
Applicable Revenue Recognition Principles and Guidance 
20. The basic principles of revenue recognition under GAAP provide that revenue must 
be realized or realizable and earned before it can be recognized.  Further, “[p]rofit is deemed to be 
realized when a sale in the ordinary course of business is effected, unless the circumstances are 
such that the collection of the sales price is not reasonably assured.”  Accounting Research Bulletin 
No. 43, Restatement and Revision of Accounting Research Bulletins, Chapter 1A. SEC Staff 
Accounting Bulletin (“SAB”) No. 101, Revenue Recognition in Financial Statements (as 
superseded, in part, by SAB No. 104, Revenue Recognition), reflects these basic principles of 
revenue recognition and provides guidance in the application of GAAP with respect to recognizing 
revenue.  SAB 101 sets forth four criteria to be considered when determining whether revenue has 
been realized or realizable and earned.  Specifically, revenue generally may be recognized when 
persuasive evidence of an arrangement exists, delivery has occurred, the seller’s price is fixed or 
determinable, and collectibility is reasonably assured. 
21. GAAP also provides that, when a right of return exists, revenue can be recognized 
at the time of sale only if all of the following conditions are met:  (1) the seller’s price is 
substantially fixed or determinable at the date of sale; (2) the buyer has paid, or the buyer is 
obligated to pay and the obligation is not contingent on resale of the product; (3) the buyer’s 
obligation would not be changed in the event of theft, physical destruction, or damage of the 
product; (4) the buyer acquiring the product for resale has economic substance apart from that 
provided by the seller; (5) the seller does not have significant obligations for future performance to 
directly bring about resale of the product by the buyer; and (6) the amount of future returns can be 
reasonably estimated.  Statement of Financial Accounting Standards No. 48, Revenue Recognition 
When Right of Return Exists. 
Respondents’ Deficient 2007 Audit 
Background 
22. Dohan + Co. issued the audit report filed with ICTV’s 2007 financial statements 
and reviewed ICTV’s quarterly statements during 2007 through the second quarter of 2008. 
23. Dohan + Co. contracted with another accounting firm to provide an audit manager 
and senior accountant to perform the field work at ICTV.  Dohan + Co. and the other accounting 
firm had worked together in a similar arrangement on several other engagements.  Under PCAOB 
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auditing standards, the staff sharing arrangement between Dohan + Co. and the other accounting 
firm was subject to the supervision rules and responsibilities set forth in AICPA Codification of 
Statements on Auditing Standards (as adopted and amended by the PCAOB) (“AU”) § 311, 
Planning and Supervision. 
24. Dohan + Co. reviewed the other accounting firm’s working papers and satisfied 
itself with both the quality and the amount of work performed by the other accounting firm.  
Dohan + Co. also made the decision to adopt the other accounting firm’s working papers, with 
little modification, and performed few additional substantive procedures. 
25. The audit team for the 2007 ICTV audit primarily consisted of Brown, the 
engagement partner; Dohan, the concurring partner; a Canadian Chartered Accountant employed 
by the other accounting firm who served as the audit manager (the “Audit Manager”); and a senior 
accountant who conducted all substantive audit procedures and field work (the “Senior 
Accountant”).  The Senior Accountant conducted the onsite work for the audit over a two-to-three 
day period in March 2008.  The Audit Manager’s responsibilities included planning the audit, 
supervising the onsite work and reviewing any work performed by the Senior Accountant.  
Brown’s responsibilities included the overall planning and supervision of the audit.  Dohan’s 
responsibilities included providing an objective review of the audit and the financial statements 
that were the subject of the report. 
The Auditors’ Working Papers 
26. On their face, the year-end 2007 audit working papers reveal that Respondents 
knew of an agreement between ICTV and HSN that claimed to contribute to a 280% increase in 
revenue over fiscal year-end 2006.  The revenue lead sheet stated: 
The Company is also now using the Home Shopping Network for sales in the US market.  
HSN buys product from the Company (DermaWand and CellRX so far) and features the 
product on various shows.  The Company records the sales once HSN has placed the order 
and the order has been shipped.  HSN does not pay until they have sold the products.  This 
process sometimes takes a few months as HSN will pre-order for future shows. 
27. A similar notation appeared on the accounts receivable lead sheet: 
HSN buys a certain amount of product from the Company prior to showing the 
infomercials.  The Company records the sale at this time.  HSN pays the Company once the 
product has actually been sold. 
28. The year-end 2007 audit working papers also documented that the HSN 
relationship was a new and material development in ICTV’s business.  An analytical review 
worksheet highlighted a 280% increase in ICTV’s annual sales revenue, from $3 million in 2006 to 
$11.3 million in 2007 due to “an agreement with the Home Shopping Network during the year to 
sell the Company’s product.”  The worksheet also reported a 414% increase to accounts receivable, 
from $555,000 in 2006 to $2.9 million in 2007, as a result of increased sales.  The material increase 
in ICTV’s revenue, ICTV’s new relationship with HSN, the contingent payment terms associated 
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with that relationship, and Respondents’ knowledge of ICTV’s deficient internal controls, among 
other factors, required Respondents to apply heightened scrutiny to the ICTV audit. 
Audit Failures by Dohan, Brown, and Dohan + Co. 
29. Brown reviewed and signed off on the working papers.  Dohan, before signing off 
on the audit, reviewed the majority of the working papers, including the revenue, accounts 
receivable, and analytical review working papers.  Thus, Respondents each knew of certain terms 
of ICTV’s arrangement with HSN, including that HSN did not pay ICTV until it sold the product 
to end users. This should have alerted Respondents that ICTV’s revenue recognition practices did 
not comply with GAAP. 
30. Indeed, Dohan understood at the time of the audit that the sell-through of ICTV’s 
product by HSN presented a revenue recognition issue under SAB 101, but failed to research the 
issue at the time of his review nor direct any other member of the audit team to research the issue. 
31. Despite knowledge of the above, Respondents unreasonably failed to properly audit 
ICTV’s revenue recognition practices.  For example, Respondents failed to obtain a copy of the 
applicable agreement between ICTV and HSN.  Brown knew that there was an agreement between 
ICTV and HSN to sell ICTV’s product.  Dohan knew that ICTV’s revenue and accounts receivable 
had increased “dramatically” in 2007 as a result of an agreement entered into with HSN.  Yet, 
Respondents each failed to inquire as to the existence of any written agreement and failed to obtain 
a copy of any written agreement.  Respondents’ failure to inquire about the terms of the applicable 
ICTV agreement with HSN, to obtain a copy of the agreement, or to adequately understand the 
nature of ICTV’s relationship with HSN was an unreasonable departure from professional 
standards.  Because of these failures, Respondents failed to recognize that under the HSN drop-
ship agreement, no sale occurred, and revenue should not have been recognized, until the product 
was sold to end users. 
32. Respondents also failed to issue audit confirmations to confirm ICTV’s accounts 
receivable and inventory, or perform adequate alternative procedures.  Respondents knew that their 
own audit program called for the confirmations of receivables and inventory.  Had confirmations 
been sent and received by the auditors, Respondents could have learned that the sales and 
inventory levels reported by ICTV were not supported. 
33. Brown and Dohan + Co. also neglected to perform other audit procedures dictated 
by the audit program.  For example, the audit program required the auditors to review and attend 
physical inventory counts.  This step was marked “NA” in the working papers, indicating that it 
was not performed.  The audit program also recommended that the auditors consider extended 
procedures to confirm sales terms and conditions with customers; this step was marked “NA” as 
well. Dohan knew that these procedures were not performed. 
34. The working papers also contain a number of internal inconsistencies that should 
have been resolved by Respondents.  For instance, although the revenue and accounts receivable 
lead sheets described how HSN did not pay ICTV until sell-through, which sometimes took “a few 
months,” the working papers elsewhere indicated that there were no “unusual or long payment 
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terms” or “buyer conditions which must be met in order to complete the sale.”  In addition, the 
revenue working papers reported that cash had been received for a $990,000 sale to HSN on 
December 21, 2007, while the accounts receivable working papers reported the $990,000 balance 
as still outstanding.  Respondents failed to reconcile any of these inconsistencies during their 
review of the working papers. 
35. Brown and Dohan + Co. also failed to properly audit ICTV’s stated revenue and 
returns for direct consumer sales.  The working papers do not reflect that the audit team considered 
ICTV’s revenue recognition practices for such sales in light of the 30-day free trial period extended 
to direct sales customers.  The working papers also do not show that the auditors performed any 
substantive testing of ICTV’s stated returns for direct sales, or that the auditors considered the 
impact of applicable GAAP guidance on estimating future returns for such sales.  The auditors also 
failed to reconcile an inherent inconsistency between ICTV’s stated returns and its disclosed 
historical return rate for direct consumer sales. 
The Auditors Issue Unqualified Audit Reports on ICTV’s 2007 Financial Statements 
Despite Numerous Audit Failures 
36. Despite these failures, Dohan, Brown, and the other auditors caused Dohan + Co. to 
issue an unqualified audit report on ICTV’s 2007 financial statements, which incorrectly 
represented that the audit had been conducted in accordance with the PCAOB’s auditing standards 
and that ICTV’s financial statements were fairly reported in conformity with GAAP.  The audit 
completion documents, which included a checklist and the auditors’ assessment that the audit was 
complete, reflect that Dohan, Brown, and the other auditors were each satisfied with the work 
performed and signed off on the release of the audit report. 
37. Respondents also conducted the audit and review work on ICTV’s restatement for 
the fiscal year ended 2007 and the first two quarters of 2008.  In March 2009, Dohan + Co. issued 
an unqualified audit report on ICTV’s restated 2007 financial statements.  The restatement working 
papers indicate that Dohan, Brown, and the other auditors each reviewed the restated financial 
statements and signed off on the release of the audit report. 
38. In September 2009, ICTV retained new auditors.  The new auditors found 
additional revenue recognition errors and brought them to ICTV’s attention.  Based upon this 
information, ICTV concluded that the restated 2007 financial statements needed to be restated.  
This additional restatement further calls into question Dohan + Co.’s competence under applicable 
PCAOB standards. 
Respondents’ Improper Professional Conduct 
39. The “applicable professional standards” for accountants practicing before the 
Commission include the PCAOB auditing standards. 
40. PCAOB auditing standards require that the auditor be proficient in accounting 
matters and that the “auditor with final responsibility for the engagement should know, at a 
minimum, the relevant professional accounting and auditing standards and should be 
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knowledgeable about the client.”  AU § 230.06, Due Professional Care in the Performance of 
Work; see also AU § 210, Training and Proficiency of the Auditor. AU Section 230 also requires 
an auditor to exercise due professional care and professional skepticism, which includes 
demonstrating a questioning mind and a critical assessment of audit evidence. 
41. PCAOB auditing standards require that “competent evidential matter . . . be 
obtained through inspection, observation, inquiries, and confirmations to afford a reasonable basis 
for an opinion regarding the financial statements under audit.”  AU § 326.01, Evidential Matter. 
This “includes both written and electronic information such as . . . contracts.”  AU § 326.17. The 
auditor is also to send out audit confirmations.  AU § 330, The Confirmation Process. 
42. Auditors must adequately plan, staff, and supervise the audit.  See AU §§ 150.02, 
Generally Accepted Auditing Standards; 210.01; 230.06; 311.01 et seq., Planning and Supervision; 
311.11 et seq.  This includes “obtain[ing] a level of knowledge of the entity’s business that will 
enable” the auditor to understand transactions and practices that may have a significant effect on 
the financial statements.  AU § 311.06. 
43. Further, AU § 316, Consideration of Fraud in a Financial Statement Audit, requires 
the auditor to assess the risks of material misstatement due to fraud and to presume that revenue 
recognition is a fraud risk. 
44. The Audit Manager was responsible for supervising and reviewing documentation 
of field work performed.  As the engagement partner, Brown had overall responsibility for the 
engagement to ensure that Dohan + Co.’s audit of ICTV’s 2007 financial statements was 
conducted in accordance with PCAOB auditing standards, including planning and supervising the 
audit and the review of field work.  Dohan, as the concurring partner, knew that his role was to 
“give a fresh, clean look at a job, to provide a fresh set of eyes on the engagement, and to assist 
where necessary in making sure the engagement goes out to the best of the firm’s ability.” 
45. Indeed, Dohan and Brown were already on notice that the PCAOB had identified 
material audit deficiencies with respect to many of the auditing standards discussed above, per an 
inspection of Dohan + Co. by the PCAOB prior to Respondents’ 2007 ICTV audit.  As a result of 
that inspection, Dohan and Brown learned that the PCAOB found a number of deficiencies 
regarding the firm’s audits of other clients, including the failure to adequately test revenue and to 
obtain sufficient evidential matter, as well as deficiencies in Dohan + Co.’s quality control 
procedures, including concurring partner reviews. 
46. During the 2007 ICTV audit, Respondents unreasonably departed from the PCAOB 
auditing standards in numerous instances, including in the manner further described below. 
47. Respondents failed to demonstrate the required level of proficiency.  Brown was 
not aware of applicable GAAP guidance that prohibits revenue recognition if payment of the 
related sales receivable was dependent upon sell-through by the customer. Although Dohan was 
aware of some of the applicable GAAP guidance, and knew that ICTV’s revenue recognition 
practices potentially violated GAAP, he failed to conduct additional research or direct another 
member of the audit team to follow up. 
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48. Respondents failed to obtain sufficient evidential matter.  Respondents failed to 
understand, or obtain a copy of, ICTV’s written contract with HSN, despite the fact that each knew 
that ICTV had an “agreement” or “business arrangement” with HSN to sell ICTV’s product.  In 
addition, Brown and Dohan each reviewed the working papers that expressly stated that ICTV’s 
revenue had materially increased in 2007 due to an “agreement” with HSN. 
49. Respondents failed to exercise due professional care and skepticism in the face of 
numerous red flags and inconsistencies.  Respondents never asked ICTV for a copy of any HSN 
agreement or documentation of the terms of the agreement.  Brown and Dohan + Co. ignored or 
disregarded specific audit program steps regarding, among others, long payment terms, buyer 
conditions in the sale of product, the confirmation of significant accounts receivable, and the 
observation of physical inventory counts.  Dohan, during his review, either agreed that such 
procedures were not necessary or failed to identify his fellow auditors’ disregard for these auditing 
steps. Respondents also failed to reconcile numerous inconsistencies during their review of the 
working papers. 
50. Respondents failed to send out accounts receivable confirmations as required by the 
audit program or to ensure adequate alternative procedures.  Further, Brown and Dohan + Co. 
knew that the audit program also recommended that the auditors send out sales terms and 
conditions and inventory confirmations but elected not to do so.  Dohan supported these decisions 
despite his belief that ICTV’s revenue recognition practice with respect to HSN presented an issue 
under SAB 101 and with the knowledge that the audit program recommended these confirmations 
be sent. 
51. Respondents failed to adequately plan, staff and supervise the audit.  Brown never 
visited ICTV or the office of the other accounting firm, and relied upon the Audit Manager to 
manage all of the field work.  Dohan failed to ensure that Brown and the Audit Manager were 
adequately proficient to conduct the audit. 
52. Brown and Dohan + Co. failed to sufficiently understand ICTV’s business to enable 
it to understand transactions that had a significant effect on ICTV’s financial statements.  Brown 
and Dohan + Co. failed to identify the impact of ICTV’s 30-day free trial period, or applicable 
GAAP standards prohibiting revenue recognition prior to customer acceptance where a trial or 
evaluation period exists.  The working papers also do not reflect that Brown or Dohan + Co. 
performed any substantive testing of ICTV’s stated returns for direct sales, or that they considered 
the impact of applicable GAAP guidance on estimating future returns for such sales.  The auditors 
also failed to reconcile an inherent inconsistency between ICTV’s stated returns and its disclosed 
historical return rate for direct consumer sales. 
53. Finally, Respondents also failed to consider other Standards of Field Work 
contained in AU Section 300, including AU Section 316, Consideration of Fraud in a Financial 
Statement Audit; AU Section 329, Analytical Procedures; and AU Section 331, Inventories. 
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E.	 VIOLATIONS 
54. Rule 102(e)(1)(ii) of the Commission’s Rules of Practice and Section 4C of the 
Exchange Act authorize the Commission to censure or deny, temporarily or permanently, the 
privilege of appearing or practicing before the Commission to accountants who are found to have 
engaged in improper professional conduct.  Under 102(e)(1)(iv), the term “improper professional 
conduct” includes “repeated instances of unreasonable conduct, each resulting in a violation of 
applicable professional standards, that indicate a lack of competence to practice before the 
Commission.” 
55. Dohan + Co.’s, Dohan’s and Brown’s actions during the engagements were 
unreasonable, failed to conform to applicable professional standards and indicate a lack of 
competence to practice before the Commission.  Dohan and Brown failed to (i) obtain sufficient 
evidential matter regarding ICTV’s relationship with HSN; (ii) demonstrate the required level of 
proficiency, particularly with respect to applicable GAAP guidance that prohibited ICTV’s 
revenue recognition practices; (iii) exercise due professional care and professional skepticism in 
performing the audit of ICTV; (iv) issue accounts receivable confirmations or to ensure adequate 
alternative procedures; and (v) adequately plan the audit and properly supervise the audit personnel 
in connection with the 2007 engagement.  Dohan + Co. issued an unqualified audit report for 
ICTV’s Form 10-K/SB stating that it had conducted its audit in accordance with PCAOB standards 
and that ICTV’s financial statements were fairly reported in conformity with GAAP.  Dohan + 
Co.’s audit, however, was not conducted in accordance with PCAOB standards, in part due to 
Dohan’s and Brown’s failures described above. 
F.	 FINDINGS 
56. As a result of the conduct described above, the Commission finds that Respondents 
Dohan + Co., Dohan, and Brown engaged in improper professional conduct pursuant to Rules 
102(e)(1)(ii) and 102(e)(1)(iv)(B)(2) of the Commission’s Rules of Practice and Section 4C of the 
Exchange Act. 
G. 	 UNDERTAKINGS 
Dohan + Co. undertakes the following: 
1. 	 Acceptance of New Public Company Audit Clients. The goal of this undertaking is 
to provide adequate time for Dohan + Co. to implement the undertakings 
concerning the auditing and quality control matters described below and implement 
such other adjustments to its audit practice required by the suspensions of Dohan 
and Brown from appearing or practicing before the Commission.  Dohan + Co. 
undertakes that, following the issuance of the Order, it will not accept new 
engagements for public company audits prior to the later of 12 months from the 
date of entry of the Order, or the date that an independent consultant certifies in 
writing that the undertakings discussed herein have been completed to the 
satisfaction of the Independent Consultant, as described in paragraph 4(b), below.  
A public company audit is defined as an engagement to audit the financial 
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statements of an “issuer” as that term is defined in Section 3(a)(8) of the Exchange 
Act. 
2. 	 Auditing Matters. The goal of this undertaking is to require Dohan + Co. to engage 
in an internal review of its existing policies and procedures concerning compliance 
with the relevant professional, regulatory and firm requirements with respect to 
public company audit engagements.  Within 12 months from the date of entry of the 
Order, Dohan + Co. shall adopt and implement policies and procedures, including 
but not limited to Quality Control Policy and Procedures, to provide Dohan + Co. 
with a reasonable assurance, for its audit and review engagements, that the firm and 
its personnel comply with professional auditing standards and applicable regulatory 
and legal requirements, and that the firm or engagement partners issue reports that 
are appropriate in the circumstances.  The elements of quality control are identified 
in the PCAOB’s Interim Standard, System of Quality Control for a CPA Firm’s 
Accounting and Auditing Practice (“QC 20”).  The Principals/Partners of Dohan + 
Co. should have a working knowledge of Dohan + Co.’s procedures and how they 
meet the requirements of QC 20. 
3. 	 Professional Development. The goal of this undertaking is to require Dohan + Co. 
auditing personnel to participate in professional development activities in subjects 
that are relevant to their responsibilities and will contribute to their technical 
training and proficiency as an auditor.  Dohan + Co. undertakes to require all of its 
professional accounting and auditing personnel, to undergo training as follows: 
(a) A minimum of 40 hours of continuing professional education (“CPE”) in the 
following areas of generally accepted accounting principles set forth in FASB 
Accounting Standard Codifications: (i) Topic 205:  Presentation of Financial 
Statements; (ii) Topic 330: Inventory; (iii) Topic 450: Contingencies; and (iv) 
Topic 605: Revenue Recognition (at leas t 16 hours on this Topic).  The CPE 
must meet the requirements of the Florida State Board of Accountancy. 
(b) A minimum of 40 hours of CPE in the following PCAOB topics and auditing 
standards
3: (i) Audit Confirmations; (ii) Cons ideration of Fraud in a Financial 
Statement Audit; (iii) Audit Planning; (iv) Audit Evidence; (v) Inventories; 
(vi) Training and Proficiency of the Independent Auditor; (vii) Planning and 
Supervision; (viii) Due Professional Care in the Performance of Work and (ix) 
3 PCAOB auditing standards consist of recent auditing standards adopted by the PCAOB and approved by the 
Commission (“AS”), as well as preexisting AICPA auditing standards adopted as interim standards by the PCAOB 
in April 2003 (“AU”). 
12 

  
 
 
 
 
 
 
 
 
                                                 
  
      
  
 
 
 
Supervision of an Audit.4  The CPE must meet the requirements of the Florida 
State Board of Accountancy. 
(c) A minimum of 40 hours of independent self-study (need not be a formal 
review course) in the following areas of accounting and auditing standards, 
including interpretative guidance by the Commission staff:  (i) Staff 
Accounting Bulletin No. 99: Materiality;  (ii) Staff Accounting Bulletin Nos. 
101: Revenue Recognition in Financial Statements, and 104: Revision of 
Topic 13; (iii) Staff Accounting Bulletin No. 108:  Considering the Effects of 
Prior Year Misstatements When Quantifying Misstatements in Current Year 
Financial Statements; (iv) FASB Accounting Standard Codification Topic 
605-15-25: Sale of Product when Right of Return Exists; (v) AU 150:  
Generally Accepted Auditing Standards; (vi) AU 550:  Other Information in 
Documents Containing Audited Financial Statements; and (vii) AS No. 7:  
Engagement Quality Review. 
4. 	 Independent Consultant. Dohan + Co. shall retain an Independent Consultant 
acceptable to the Commission staff, to work with Dohan + Co. to assure the 
Commission staff that Dohan + Co. has satisfactorily implemented the undertakings 
expressed herein and that after such undertakings it is reasonable to expect that the 
violations found have been remedied and that Dohan + Co.’s future audits should 
result in compliance with the relevant professional, regulatory and firm 
requirements with respect to public company audit engagements.  The Independent 
Consultant shall report to the Commission staff as follows: 
(a) 	 The Independent Consultant shall report to the Commission staff in 
writing six months and 12 months from the date work has begun as to the 
findings of the Independent Consultant’s review and Dohan + Co.’s efforts 
at correcting the violations. 
(b) 	 The suspension from accepting new audit engagements for public 
company clients, as described in paragraph 1, above, shall continue until 
the Independent Consultant has certified in writing that the undertakings 
discussed herein have been completed to the satisfaction of the 
Independent Consultant. 
(c) 	 The Independent Consultant will review a sampling of Dohan + Co.’s 
audits of SEC registrants after the 12-month suspension discussed in 
paragraph 1, above, has elapsed and after Dohan + Co. has resumed 
4 PCAOB guidance on many of the auditing standards listed herein are in transition.  Certain existing standards are 
expected to be amended or superseded.  Specifically, the PCAOB has recently adopted AS No. 8 through AS No. 15 
(Eight New Risk Assessment Standards), which have been submitted to the Commission for approval (see Securities 
and Exchange Commission Release No. 34-62919).  The standards, if approved, will become effective for audits of 
fiscal periods beginning on or after December 15, 2010.  The CPE completed pursuant to these undertakings should 
focus on the requirements of the new standards, including changes made to existing standards if approved. 
13 

  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
auditing SEC registrants, for a 12-month period.  The Independent 
Consultant and Dohan + Co. shall certify that they each have no reason to 
believe that Dohan + Co.’s audits do not conform with the relevant 
professional, regulatory and firm requirements with respect to public 
company audit engagements in all material matters. 
All reports and certifications shall be submitted to Tracy Davis, Assistant Regional 
Director, San Francisco Regional Office or her successor, with copies to the Office 
of Chief Counsel of the Enforcement Division and to the PCAOB, Director of 
Registration and Inspection. 
5. 	 Independent Consultant Independence. Dohan + Co. will require the Independent 
Consultant to enter into an agreement that provides that for the period of 
engagement and for a period of two years from completion of the engagement, the 
Independent Consultant shall not enter into any employment, consultant, attorney-
client, auditing or other professional relationship with Dohan + Co., or any of its 
present or former affiliates, directors, officers, employees, or agents acting in their 
capacity. The agreement will also provide that the Independent Consultant will 
require that any firm with which he/she is affiliated or of which he/she is a member, 
and any person engaged to assist the Independent Consultant in performance of 
his/her duties under the Order shall not, without prior written consent of the San 
Francisco Regional Office, enter into any employment, consultant, attorney-client, 
auditing or other professional relationship with Dohan + Co., or any of its present 
or former affiliates, directors, officers, employees, or agents acting in their capacity 
as such for the period of the engagement and for a period of two years after the 
engagement. 
6. 	 Joint Audit Arrangements. Dohan + Co. agrees to cease permanently all joint audit 
arrangements with other auditors in which Dohan + Co. serves as the principal 
auditor in connection with audits of SEC registrants, other than joint arrangements 
required by foreign jurisdictions. 
7. 	 Certification of Compliance. Dohan + Co. will certify, in writing, compliance with 
the undertakings set forth above.  The certification shall identify the undertakings, 
provide written evidence of compliance in the form of a narrative, and be supported 
by exhibits sufficient to demonstrate compliance.  The Commission staff may make 
reasonable requests for further evidence of compliance, and Dohan + Co. agrees to 
provide such evidence. The certification and supporting material shall be submitted 
to Tracy Davis, Assistant Regional Director, San Francisco Regional Office or her 
successor, with a copy to the Office of Chief Counsel of the Enforcement Division, 
no later than sixty (60) days from the date of the completion of the undertakings. 
14 

  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
 
   
 
 
 
   
 
  
III. 
In view of the foregoing, the Commission deems it appropriate to impose the sanctions 
agreed to in Respondents’ Offers. 
Accordingly, it is hereby ORDERED, effective immediately, that: 
Dohan + Co. 
A. Dohan + Co. is hereby censured pursuant to Rule 102(e)(1)(ii) and 
102(e)(1)(iv)(B)(2) of the Commission’s Rules of Practice and Section 4C of the Exchange Act. 
Dohan 
B. Dohan is denied the privilege of appearing or practicing before the Commission as 
an accountant. 
C. After three years from the date of this order, Dohan may request that the 
Commission consider his reinstatement by submitting an application (attention:  Office of the 
Chief Accountant) to resume appearing or practicing before the Commission as: 
1. a preparer or reviewer, or a person responsible for the preparation or 
review, of any public company’s financial statements that are filed with the Commission.  Such 
an application must satisfy the Commission that Dohan’s work in his practice before the 
Commission will be reviewed either by the independent audit committee of the public company 
for which he works or in some other acceptable manner, as long as he practices before the 
Commission in this capacity; and/or 
2. an independent accountant.  Such an application must satisfy the 
Commission that: 
(a) Dohan, or the public accounting firm with which he is associated, is 
registered with the Public Company Accounting Oversight Board (“Board”) in accordance with the 
Sarbanes-Oxley Act of 2002, and such registration continues to be effective; 
(b) Dohan, or the registered public accounting firm with which he is 
associated, has been inspected by the Board and that inspection did not identify any criticisms of or 
potential defects in the respondent’s or the firm’s quality control system that would indicate that 
the respondent will not receive appropriate supervision; 
(c) Dohan has resolved all disciplinary issues with the Board, and has 
complied with all terms and conditions of any sanctions imposed by the Board (other than 
reinstatement by the Commission); and 
(d) Dohan acknowledges his responsibility, as long as Dohan appears 
or practices before the Commission as an independent accountant, to comply with all 
15 

  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
 
   
 
 
 
 
requirements of the Commission and the Board, including, but not limited to, all requirements 
relating to registration, inspections, concurring partner reviews and quality control standards. 
D. The Commission will consider an application by Dohan to resume appearing or 
practicing before the Commission provided that his state CPA license is current and he has 
resolved all other disciplinary issues with the applicable state boards of accountancy.  However, 
if state licensure is dependent on reinstatement by the Commission, the Commission will 
consider an application on its other merits.  The Commission’s review may include consideration 
of, in addition to the matters referenced above, any other matters relating to Dohan’s character, 
integrity, professional conduct, or qualifications to appear or practice before the Commission. 
E. As a condition for reinstatement, Dohan shall have completed the professional 
training as described in Section III(G)(3), above. 
Brown 
F. Brown is denied the privilege of appearing or practicing before the Commission as 
an accountant. 
G. After three years from the date of this order, Brown may request that the 
Commission consider her reinstatement by submitting an application (attention:  Office of the 
Chief Accountant) to resume appearing or practicing before the Commission as: 
1. a preparer or reviewer, or a person responsible for the preparation or 
review, of any public company’s financial statements that are filed with the Commission.  Such 
an application must satisfy the Commission that Brown’s work in her practice before the 
Commission will be reviewed either by the independent audit committee of the public company 
for which she works or in some other acceptable manner, as long as she practices before the 
Commission in this capacity; and/or 
2. an independent accountant.  Such an application must satisfy the 
Commission that: 
(a) Brown, or the public accounting firm with which she is associated, 
is registered with the Public Company Accounting Oversight Board (“Board”) in accordance with 
the Sarbanes-Oxley Act of 2002, and such registration continues to be effective; 
(b) Brown, or the registered public accounting firm with which she is 
associated, has been inspected by the Board and that inspection did not identify any criticisms of or 
potential defects in the respondent’s or the firm’s quality control system that would indicate that 
the respondent will not receive appropriate supervision;
 (c) Brown has resolved all disciplinary issues with the Board, and has 
complied with all terms and conditions of any sanctions imposed by the Board (other than 
reinstatement by the Commission); and 
16 

  
 
 
 
 
 
 
 
 
 
 
 
   
 (d) Brown acknowledges her responsibility, as long as Brown appears 
or practices before the Commission as an independent accountant, to comply with all requirements 
of the Commission and the Board, including, but not limited to, all requirements relating to 
registration, inspections, concurring partner reviews and quality control standards. 
H. The Commission will consider an application by Brown to resume appearing or 
practicing before the Commission provided that her state CPA license is current and she has 
resolved all other disciplinary issues with the applicable state boards of accountancy.  However, if 
state licensure is dependent on reinstatement by the Commission, the Commission will consider an 
application on its other merits. The Commission’s review may include consideration of, in 
addition to the matters referenced above, any other matters relating to Brown’s character, integrity, 
professional conduct, or qualifications to appear or practice before the Commission. 
I. As a condition for reinstatement, Brown shall have completed the professional 
training as described in Section III(G)(3), above. 
 By the Commission.
       E l i z a b e t h M . M u r p h y
       S e c r e t a r y 
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Service List 
Rule 141 of the Commission's Rules of Practice provides that the Secretary, or 
another duly authorized officer of the Commission, shall serve a copy of the Order Making 
Findings and Imposing Remedial Sanctions Pursuant to Section 4C of the Securities 
Exchange Act of 1934 and Rule 102(e) of the Commission’s Rules of Practice as to 
Dohan + Company CPAs, Steven H. Dohan, CPA, and Nancy L. Brown, CPA (“Order”), on 
the Respondents and their legal agents. 
The attached Order has been sent to the following parties and other persons entitled 
to notice: 
Honorable Carol Fox Foelak 
Administrative Law Judge 
Securities and Exchange Commission 
100 F Street, N.E. 
Washington, DC 20549-2557 
Lloyd Farnham, Esq. 
John Yun, Esq. 
Jason Habermeyer, Esq. 
San Francisco Regional Office 
Securities and Exchange Commission 
44 Montgomery Street, Suite 2600 
San Francisco, CA 94104 
Dohan + Company CPAs 
c/o Michael Tarre, Esq. 
Two South Biscayne Boulevard, Suite 3700 
Miami, FL 33131 
Mr. Steven H. Dohan 
c/o Michael Tarre, Esq. 
Two South Biscayne Boulevard, Suite 3700 
Miami, FL 33131 
Ms. Nancy L. Brown 
c/o Susan E. Trench, Esq. 
Goldstein, Tanen & Trench, P.A. 
One Biscayne Tower, Suite 3700 
Two South Biscayne Boulevard 
Miami, FL 33131 
18 

  
 
 
 
 
 
 
Michael Tarre, Esq. 
Two South Biscayne Boulevard, Suite 3700 
Miami, FL 
(Counsel for Dohan + Company CPAs and Steven H. Dohan)
 
33131 
Susan E. Trench, Esq. 
Goldstein, Tanen & Trench, P.A. 
One Biscayne Tower, Suite 3700 
Two South Biscayne Boulevard 
(Counsel for Nancy L. Brown)
 
Miami, FL 33131 
19 