Ernst & Young better have some "answers"...
It was reported this week that the massive audit firm was fined with a record $100 million fine after regulators found out that the company knew some of its auditors had been cheating on exams for "several years" - and did nothing to stop it.
This week, the Securities and Exchange Commission said that a "significant number" of candidates cheated on the Certified Public Accountant test. The kicker? Most of the cheating was on the "ethics" portion of the exam...
The SEC also 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," a new report from CNN revealed.
Gurbir Grewal, director of the SEC's Enforcement Division, commented this week: "This action involves breaches of trust by gatekeepers within the gatekeeper entrusted to audit many of our nation's public companies. It's simply outrageous that the very professionals responsible for catching cheating by clients cheated on ethics exams of all things."
He said it was "equally shocking" that the company didn't fess up during the investigation.
Grewal continued: "This action should serve as a clear message that the SEC will not tolerate integrity failures by independent auditors who choose the easier wrong over the harder right."
The SEC also ordered that Ernst & Young bring on two independent firms to "help remediate its deficiencies," the report said.
"Nothing is more important than our integrity and our ethics," the auditor responded by saying. "We have repeatedly and consistently taken steps to reinforce our culture of compliance, ethics, and integrity in the past. We will continue to take extensive actions, including disciplinary steps, training, monitoring, and communications that will further strengthen our commitment in the future."