Ernst & Young, one of the biggest accounting firms in the world, agreed to shell out $100 million to settle a fine imposed on it by the Securities and Exchange Commission (SEC). The multinational firm also partially admitted that some of its employees engaged in ethics exam cheating.
According to the settlement document issued by SEC, “a significant number of EY audit professionals cheated on the ethics component of the Certified Public Accountant (CPA) exam.” The cheating also spilled to several other exams required for maintaining a CPA license and took place over multiple years.
SEC’s investigation found that between 2017 and 2021, around 50 auditors sent and/or received answers to the ethics component of the CPA exam. In addition, several hundred cheated their way through CPE (continuing professional education) trainings in order to keep their license. Finally, many EY employees knew about the practices but failed to report them.
Besides paying a $100 million fine, which is the biggest ever paid to SEC by an auditing firm, Ernst & Young will also have to take other actions in order to make up for its wrongdoings. This includes hiring a couple of independent investigators who will “review the firm’s ethics and integrity policies” and investigate how much the EY employees contributed to the company’s “failure to correct its misleading submission.”