In order to resolve complaints from the U.S. Securities and Exchange Commission (SEC) that its auditors had cheated on CPA examinations and that it had mislead the agency’s investigators, Big Four accounting firm Ernst & Young will pay $100 million. The London-based auditor acknowledged that a “substantial proportion” of its audit specialists had falsified answers on their CPA tests. The CPA is the primary educational requirement for accountants in the US.
Brendan Mullin, head of media relations at EY, stated that the company “acknowledges the conclusions found by the SEC” and added that the firm’s reaction has been “thorough, detailed, and successful.” The Wall Street watchdog discovered that hundreds of EY employees cheated to pass the CPA ethical CPE requirements during a four-year period between 2017 and 2021, while 49 EY employees “obtained or disseminated” answers to CPA licencing tests.
According to a complaint with the SEC, “a large number of EY professionals who did not cheat themselves but knew their colleagues were cheating and assisting cheating, violated the firm’s Code of Conduct by failing to disclose this wrongdoing.” The SEC said that Ernst & Young agreed to pay its biggest penalties ever levied against an auditor. EY also consented to “undertake considerable corrective efforts” to address ethical issues in addition to paying the fine.
“This lawsuit includes betrayals of trust by gatekeepers who were entrusted with auditing many of the publicly traded firms in our country. It is absolutely ridiculous that the very specialists tasked with identifying client cheating also failed on ethics tests “The enforcement director of the SEC, Gurbir Grewal, made a statement.