Ernst & Young was fined $100 million by the U.S. government, after employees cheated on exams for years and the “big four” audit firm did nothing to stop it.
According to the Securities and Exchange Commission investigation, 49 EY employees “obtained or circulated” answer keys to CPA license exams, while hundreds cheated after that.
The SEC said that Ernst & Young “made a submission” that it didn’t have “current issues with cheating when, in fact, the firm had been informed of potential cheating on a CPA ethics exam.”
“This action involves breaches of trust by gatekeepers within the gatekeeper entrusted to audit many of our nation’s public companies,” said Gurbir Grewal, director of the SEC’s Enforcement Division. “It’s simply outrageous that the very professionals responsible for catching cheating by clients cheated on ethics exams of all things.”
The $100 million fine is its largest ever against an auditing firm. The SEC ordered Ernst & Young to retain two independent consultants.
Ernst & Young said in a statement that “nothing is more important than our integrity and our ethics” and that it is complying with the SEC’s order.
“We will continue to take extensive actions, including disciplinary steps, training, monitoring, and communications that will further strengthen our commitment in the future,” a spokesperson for the London based firm said.