Ernst & Young (EY) will pay the largest fine imposed by the United States authorities on a consulting firm, US$100 million, after admitting that its auditors cheated for years in the exams required to have a license in the country, according to a government report. .
Employees cheated on the ethics component of CPA certification tests and professional courses to ensure they properly audit companies, according to a statement from the U.S. Securities and Exchange Commission (SECin English).
Those certifications (CPAor Certified Public Accountant) are necessary for auditors to evaluate the financial documents of listed companies in the United States and ensure that they comply with regulations.
According to the fine order of the SECreviewed by EFE, “hundreds” of auditors cheated using answer guides between 2017 and 2021, but before that, between 2012 and 2015, another 200 already took advantage of a bug in the exam software that allowed them to pass with a low percentage of correct answers.
“It’s just outrageous that the same professionals who are responsible for catching cheating clients cheated on ethics exams, on top of that.”, said the director of the SEC’s enforcement division, Gurbir Grewal, adding that the consultancy also “hindered” the investigation into the matter.
In that sense, EY also admitted that it delivered documents to the SEC during his investigation assuring that there were no problems, when there really was “been informed of potential cheating” internally in the ethics exams, and also did not cooperate when the authorities investigated that same fact.
In addition to paying $100 million, the consultancy will have to take extensive steps to correct its “deficiencies” and review its ethics and integrity policies, which according to the company are the essential values by which it is governed.
In a note to the media, EY said that “nothing is more important” than ethics and integrity, adding: “Our response to this unacceptable behavior in the past has been thorough, extensive and effective.”
In 2019, the SEC fined KPMG, another of the Big Four consulting firms known as the “Big Four,” $50 million for misconduct including cheating on internal training exams.