{"id":81919,"date":"2022-06-29T01:30:32","date_gmt":"2022-06-29T05:30:32","guid":{"rendered":"https:\/\/www.hedgeco.net\/news\/?p=81919"},"modified":"2022-06-29T01:46:55","modified_gmt":"2022-06-29T05:46:55","slug":"ernst-young-to-pay-100-million-penalty-for-employees-cheating-on-cpa-ethics-exams-and-misleading-investigation","status":"publish","type":"post","link":"https:\/\/hedgeco.net\/news\/06\/2022\/ernst-young-to-pay-100-million-penalty-for-employees-cheating-on-cpa-ethics-exams-and-misleading-investigation.html","title":{"rendered":"Ernst & Young to Pay $100 Million Penalty for Employees Cheating on CPA Ethics Exams and Misleading Investigation"},"content":{"rendered":"\n

(HedgeCo.Net) Largest Penalty Ever Imposed by SEC Against an Audit Firm<\/strong> The Securities and Exchange Commission has charged Ernst & Young <\/strong>LLP (EY) for cheating by its audit professionals on exams required to obtain and maintain Certified Public Accountant (CPA) licenses, and for withholding evidence of this misconduct from the SEC\u2019s Enforcement Division during the Division\u2019s investigation of the matter. EY admits the facts underlying the SEC\u2019s charges and agrees to pay a $100 million penalty <\/strong>and undertake extensive remedial measures to fix the firm\u2019s ethical issues.<\/p>\n\n\n\n

\u201cThis action involves breaches of trust by gatekeepers within the gatekeeper entrusted to audit many of our Nation\u2019s public companies. It\u2019s simply outrageous that the very professionals responsible for catching cheating by clients cheated on ethics exams of all things,\u201d said Gurbir S. Grewal, Director of the SEC\u2019s Enforcement Division. \u201cAnd it\u2019s equally shocking that Ernst & Young hindered our investigation of this misconduct. This action should serve as a clear message that the SEC will not tolerate integrity failures by independent auditors who choose the easier wrong over the harder right.\u201d<\/p>\n\n\n\n

EY admits that, over multiple years, a significant number of EY audit professionals cheated on the ethics component of CPA exams and various continuing professional education courses required to maintain CPA licenses, including ones designed to ensure that accountants can properly evaluate whether clients\u2019 financial statements comply with Generally Accepted Accounting Principles.<\/p>\n\n\n\n

EY further admits that during the Enforcement Division\u2019s investigation of potential cheating at the firm, EY made a submission conveying to the Division that EY did not have current issues with cheating when, in fact, the firm had been informed of potential cheating on a CPA ethics exam. EY also admits that it did not correct its submission even after it launched an internal investigation into cheating on CPA ethics and other exams and confirmed there had been cheating, and even after its senior lawyers discussed the matter with members of the firm\u2019s senior management. And as the Order finds, EY did not cooperate in the SEC\u2019s investigation regarding its materially misleading submission.<\/p>\n\n\n\n

In addition to paying a $100 million penalty, the Order requires EY to engage in extensive undertakings, including retaining two separate independent consultants to help remediate its deficiencies. One consultant will review the firm\u2019s policies and procedures relating to ethics and integrity. The other will review EY\u2019s conduct regarding its disclosure failures, including whether any EY employees contributed to the firm\u2019s failure to correct its misleading submission.<\/p>\n\n\n\n

\u201cThe SEC will not permit the submission of misleading information or any action that delays or frustrates our mandate to protect investors and our markets,\u201d said Melissa R. Hodgman, Associate Director of the SEC\u2019s Enforcement Division. \u201cErnst & Young faces significant sanctions and extensive remediation to ensure that its culture and conduct meet the ethical standards required of those responsible for the integrity of our capital markets.\u201d<\/p>\n\n\n\n

The Order finds that EY violated a Public Company Accounting Oversight Board (PCAOB) rule requiring the firm to maintain integrity in the performance of a professional service, committed acts discreditable to the accounting profession, and failed to maintain an appropriate system of quality control. EY has admitted the facts underlying these findings and acknowledged that its conduct violated the integrity standard and provides a basis for the SEC to impose remedies against the firm pursuant to Sections 4C(a)(2) and (a)(3) of the Exchange Act and Rules 102(e)(1)(ii) and (iii) of the Commission\u2019s Rules of Practice.<\/p>\n","protected":false},"excerpt":{"rendered":"

(HedgeCo.Net) Largest Penalty Ever Imposed by SEC Against an Audit Firm The Securities and Exchange Commission has charged Ernst & Young LLP (EY) for cheating by its audit professionals on exams required to obtain and maintain Certified Public Accountant (CPA) […]<\/p>\n","protected":false},"author":4,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[16,3,16048,16047],"tags":[],"class_list":["post-81919","post","type-post","status-publish","format-standard","hentry","category-hedgeco-networks-press-releases","category-hedgeco-news","category-hedgecovest-news","category-insider-trading-2"],"_links":{"self":[{"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/posts\/81919","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/comments?post=81919"}],"version-history":[{"count":1,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/posts\/81919\/revisions"}],"predecessor-version":[{"id":81920,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/posts\/81919\/revisions\/81920"}],"wp:attachment":[{"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/media?parent=81919"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/categories?post=81919"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/tags?post=81919"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}