One of the world’s largest and most trusted Accounting firms, Ernst & Young has been fined by the SEC $100 million after auditors reportedly ‘cheated’ on their ethics exam.
The SEC makes this story seem dire for the accounting giant. CBS reported:
Ernst & Young cheated on the ethics section of the Certified Public Accountant exam and withheld evidence of the behavior from regulators, according to the Securities and Exchange Commission.
The SEC has fined EY $100 million — the largest penalty ever for an accounting firm — the agency announced on Tuesday. Beyond breaking accounting rules, the company “hindered” the agency’s probe of the misconduct by withholding information from the SEC, the regulator stated.
“It’s simply outrageous that the very professionals responsible for catching cheating by clients cheated on ethics exams,” Gurbir Grewal, director of the SEC’s enforcement division, said in a statement. “It’s equally shocking that Ernst & Young hindered our investigation of this misconduct.”
After being told of the potentially untruthful conduct, EY “indicated that the firm did not have any current issues with cheating,” and never informed the agency when an internal investigation found evidence of it, according to the SEC.
Nearly 50 EY audit employees shared answers on the ethics part of the CPA exam between 2017 and 2021, with hundreds more cheating on continuing professional education courses, the SEC said. A significant number of EY professionals who did not cheat but knew their colleagues did, and facilitated the cheating, also violated the firm’s code of conduct by failing to report it.
There is much in what the far-left mainstream media is not telling you in regards to this story. It’s as if the corrupt government entities want to pretend that they are mandating law and order while they ignore and destroy major laws themselves. This really appears like a sham and here’s why.
Of course, there should be no ‘cheating’ on any exam at any time. But the ‘ethics exam’ related to the CPA is unique. This exam (I write from personal experience) is given to the individuals who pass the CPA exam. The CPA exam itself is very challenging and takes months of study to qualify and prepare for. But the ethics portion is different.
After an individual passes the CPA exam, the individual is told to take the open-book ethics exam before they can receive their certificate from the state that they passed the exam. The ethics exam is OPEN BOOK. The questions are few and the answers to the questions can be found in a small text that is provided to the ethics exam taker.
This is not part of the CPA exam that is closed book and taken after years of study. An individual can not pass the ethics exam and just take it over until they get all the answers right.
Yes, cheating is not proper, but for the SEC to fine E&Y or any entity, this amount of money for ‘cheating’ on the ethics exam does not seem equitable. This rather seems like a statement from the SEC to try and proclaim their demands for ethics which they themselves don’t embed.
Look at the actions of the leadership of the SEC in regards to the Ripple Case and you’ll understand what I mean.
This is just another example of the double standards of justice within our government.