EY, the audit giant, has been fined a record US$100mln (£82mln) after close to 50 of its accountants cheated on an ethics exam in the US, and hundreds more cheated on professional education courses.
The US Securities and Exchange Commission hit the firm with the penalty after finding that the audit team members cheated on the ethics section of the Certified Public Accountant (CPA) exam between 2017 and 2021.
Not only that, EY management then tried to mislead regulators about the cheating and hindered their investigation, leading to the largest fine the SEC has ever meted out.
“It’s simply outrageous that the very professionals responsible for catching cheating by clients cheated on ethics exams," said SEC enforcement chief Gurbir Grewal.
“It’s equally shocking that Ernst & Young hindered our investigation of this misconduct… This action involves breaches of trust by gatekeepers within the gatekeeper entrusted to audit many of our nation’s public companies.”
Made up of 40 multiple choice questions, the ethics exam is a requirement for anyone looking to become a registered accountant in the US.
EY must now hire two separate consultants to examine its ethics policies and another to review disclosure failures.
An EY spokesman said the Big Four accountant "will continue to take extensive actions, including disciplinary steps, training, monitoring, and communications that will further strengthen our commitment in the future".