Ernst & Young, one of the world’s largest auditors, has agreed to pay a $ 100 million fine after U.S. securities regulators discover that some of the auditors have cheated on ethical exams. ..
The penalty is the largest penalty ever imposed by the Securities and Exchange Commission on auditing companies. An administrative civil order filed by a regulatory agency violated public accounting rules designed by Ernst (also known as EY) to mislead investigators, withhold evidence, and maintain professional integrity. Said.
Guruville S. Grewar, executive director of the committee, said in announcing the settlement on Tuesday, “It is simply that the experts responsible for catching fraud by clients have cheated in all ethical tests. That’s ridiculous. “
The penalty is Twice as much as KPMGAnother major audit company paid in 2019 to resolve an investigation of similar allegations of fraud by auditors in internal training exams.
Ernst, who admitted in order that the act was wrong, could not immediately comment on the settlement.
According to the Commission, the ethics exams deceived by Ernst auditors were part of a continuing education program offered in most states for accountants to hold professional licenses. According to the SEC, the fraud involved hundreds of auditors from 2017 to 2021.
Ernst’s 49 auditors received an ethical exam “answer key” that was part of the first process of becoming a certified accountant, in accordance with the SEC’s administrative order.
Regulators said this was not the first time that Ernst employees had been fraudulent in ethical testing. The SEC said there were some similar fraudulent scandals that the company handled internally between 2012 and 2015.
As part of the settlement, the SEC has requested Ernst to hire two independent consultants. One confirms the company’s policy on ethical procedures and the other confirms that it did not properly disclose fraudulent activity.
“The settlement should serve as a clear message that the SEC does not tolerate failure of integrity by independent auditors,” Grewar said.
