Ernst & Young hit with $100 million fine over cheating on ethics tests

[Omaha Steve]

Source: Washington Post

Hundreds of employees at the accounting giant shared answers to exams required to maintain their licenses

By Tory Newmyer

Hundreds of auditors at accounting giant Ernst & Young cheated on ethics tests they were required to take to get or maintain their professional licenses, and the company withheld evidence of the misconduct from federal authorities investigating the matter, according to the Securities and Exchange Commission.

In response, the SEC is imposing a $100 million fine on the company, the largest ever on an audit firm, the agency announced Tuesday.

“This action involves breaches of trust by gatekeepers within the gatekeeper entrusted to audit many of our nation’s public companies,” Gurbir Grewal, SEC enforcement director, said in a statement. “It’s simply outrageous that the very professionals responsible for catching cheating by clients cheated on ethics exams of all things.”

In a statement, Ernst & Young admitted to the SEC’s charges and said it is complying with the agency’s penalty.



Ernst & Young's logo is seen in Zurich. (Arnd Wiegmann/Reuters)

Read more: https://www.washingtonpost.com/business/2022/06/28/ernst-young-cheating-sec-fine/

[IronLionZion]

1. Ethics is for losers. Winners don't have time for ethics

[howardmappel]

2. Lose their licenses, including any supervisors who knew or should have known.

Persons involved should also lose their licenses, etc.

[TexasTowelie]

6. Exactly.

It's an obvious violation of ethical standards by the employees involved and each one should be fired.

[BlueSky3]

3. Wow,

that's a shocker. Thanks for posting.

[RAB910]

4. WOW! cheating on an ethics test

well if you are going to do something bad, might as well go big

[catrose]

12. Cheating on an ethics test by an audit firm

And NOBODY in the company thought this was weird, not to say wrong?

[dchill]

5. That really gets to the heart of the matter.

[Lonestarblue]

7. I'm glad to see fines like this, but too often corporate leaders never get punished.

I don’t know that it has gotten worse—I still remember Enron—but I think that overall lawlessness got a lot worse with Trump in office. It was as if his followers and perhaps others knew that he was and is a criminal and, more importantly, always gets away with his crimes.So why should ‘t they?

I hope his impunity is about to come to an end.

[PoliticAverse]

8. Nothing quite more ironic than cheating on an ethics exam. n/t

[TheRickles]

11. More ironic, and also moronic. :-)

[okaawhatever]

20. My company had a worker injured at a 3 month injury free celebration. Not as bad, but

an honorable mention.

[PoliticAverse]

22. I think that falls under "tempting fate". n/t

[harumph]

9. Say it ain't so! They were Lehman Bros. accountant

https://elischolar.library.yale.edu/journal-of-financial-crises/vol1/iss1/5/

[twodogsbarking]

10. This isn't adding up to me.

I need to know more.

[Midnight Writer]

13. Surprised Ernst & Young are complying. I figured they would take it to The Supreme Court.

Supreme Court would probably declare the SEC unconstitutional. I expect them to do that in due course anyway.

[3825-87867]

14. Who gets the fine money?

and what about SEC fines and bank fines and especially when the gov fines corps. Where does the money go? To the general fund so it can be divied up again for business?

Just curious.

[jaxexpat]

15. "Well how else can we afford these fines if we don't cheat?" asked Mr. Ernst of Mr. Young.

"Shut up! You stupid bean counter. I'm tryin' to think,"" replied Mr. Young.

[Wonder Why]

16. The SEC should NOT have fined the company!

They should have fined the top people involved in allowing employees to cheat and failing to report it to the government. And if those top people committed fraud by doing so, those individuals should be charged with crimes.

Now when companies get "convicted" or fined for wrongdoing, the executives walk off scot-free. Sure, they may receive smaller bonuses from the partnership but if they were individually fined, they would have to pay more in taxes when the company "awards" them bigger bonuses from the higher profits and the individuals would more likely become bigger targets of the IRS.

Imagine a personal fine of $10M. The hit to your greed would be a welcome pleasure (for the rest of us, at least) and a personal reminder of what ethics is all about.

[Joinfortmill]

17. Holy shit

[drmeow]

18. Still too small

Take 1/2 of their assets.

[Yavin4]

19. Ethics Exam Test. Question 1: Is it okay to cheat on this exam?

Immediate fail.

[maxsolomon]

21. The Ethics exam is one thing, but the MORALS exam? Well, that's different.

They'd never cheat there.