Ernst & Young, a major accounting firm, has agreed to pay $100 million to the US Securities and Exchange Commission (SEC) for charges of cheating on certified public accounting (CPA) exams and misleading investigators.
The London-based auditor admitted to the charges and agreed to pay the largest fine against an auditor. The CPA is the key qualification for accountants in the US. EY has also agreed to undertake extensive remedial measures to fix the firm’s ethical issues. The Wall Street watchdog found that 49 EY professionals obtained or circulated answer keys to CPA license exams, while hundreds of others cheated to complete continuing professional education components relating to CPA ethics.
The SEC’s enforcement director, Gurbir Grewal, criticized Ernst & Young for breaching trust by gatekeepers entrusted to audit many public companies. EY submitted to the SEC that it did not have issues with cheating when it had been informed of potential cheating on a CPA ethics exam by a staff member. The SEC also found that EY violated a Public Company Accounting Oversight Board (PCAOB) rule requiring the firm to maintain integrity in the performance of a professional service.
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April 29, 2024
