SEC Fines EY for Staying Silent on Employee Cheating on Ethical Exam

EY (Ernst & Young) was fined $100 million by SEC. According to NPR, since 2012, the firm’s auditors had cheated to pass key exams that are needed for certified public accountant licenses. EY also had internal reports but didn’t report their wrongdoing to its regulators during the investigation.

“It’s simply outrageous that the very professionals responsible for catching cheating by clients cheated on ethics exams of all things,” Gurbir S. Grewal, director of the SEC’s Enforcement Division, said in a release.

The fine is the largest penalty ever imposed by the SEC on an audit firm. The CPA, or certified public accountant, licenses are needed by auditors to evaluate the financial statements of companies and ensure they are complying with laws.

However, the SEC says that a “significant number” of Ernst & Young audit professionals specifically cheated on the ethics component of the CPA exams that were required for their accounting jobs.

The EY is a multinational professional partnership, the headquarter located in London, England, and one of 4 big accounting firms worldwide. Revenue is $40 billion (US dollars, as of 2021), privately owned the seventh-largest firm in the US, and continuously have ranked for the past 21 years for 100 Best Companies to Work For in the Fortune magazine.

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