SEC, Ernst & Young and Bally Total Fitness.

2. What did E&Y agree to send to Kenneth R. Lench?

1. What was the problem with Bally’s “Reactivation” Revenue Recognition policy?

2. Who is Randy G. Fletchall, CPA?

3. What is a “preferability letter"?

4. Why was heightened scrutiny warranted in connection with Bally’s accounting methods?

5. Which is better - accrual accounting or cash basis accounting?

6. Did Fletchall exercise due care according to SEC - why not?

7. What did the SEC do to Fletchall ?

Questions (E)

1. Who is Mark V. Sever ?

2. What was he charged of by the SEC?

3. What did the SEC do to Mark V. Sever?

1. Who are John W. Dwyer and Theodore P. Noncek ? What were their previous positions and where did they work?

2. What did they agree to with the SEC?

3. By how much did Bally overstate its year-end 2001 net worth by?

A. SEC Charges Ernst & Young and Six Partners for Roles in Accounting Violations at Bally Total Fitness • http://www.sec.gov/news/press/2009/2009-271.htm

D. Securities and Exchange Commission deems it appropriate and in the public interest that that public administrative proceedings be, and hereby are, instituted against Randy G. Fletchall, CPA • Order Against Randy G. Fletchall, CPA • http://www.sec.gov/litigation/admin/2009/34-61191.pdf