: SEC fines Ernst & Young $100 million for employees cheating on CPA ethics exams

by | Jun 28, 2022 | Stock Market

Accounting giant Ernst & Young will pay $100 million to settle charges with the Securities and Exchange Commission that hundreds of its employees cheated on the ethics components of the Certified Public Accountant examination and continuing education courses and for withholding information about the misconduct to regulators. “It’s simply outrageous that the very professionals responsible for catching cheating by clients cheated on ethics exams of all things,” Gurbir Grewal, the SEC’s enforcement chief said in a press release. “And it’s equally shocking that Ernst & Young hindered our investigation of this misconduct.”

The SEC’s order states that between 2017 and 2019, 49 audit professionals at the firm sent or received answer keys to the CPA ethics exams, while hundreds more cheated on continuing professional education courses required by state accountancy boards for accountants to maintain their licenses. The $100 million fine is twice that levied against competitor KPMG back in 2019 for similar violations, and the severity of the fine against Ernst & Young is due in part to its obstruction of regulators investigation, according to senior SEC officials. Ernst & Young admitted that during the SEC’s investigation, the company misled the regulator by declining to share information about potential cheating on the CPA exam that had been shared with it. “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 …

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