Those Who Catch Cheating Cheated on Their Ethics Exams

Ernst & Young has to pay a $100M fine to the SEC
By John Johnson,  Newser Staff
Posted Jun 28, 2022 11:00 AM CDT
Irony Alert: Accountants Cheated on Ethics Exams
Stock photo.   (Getty/Tippapatt)

(Newser) – It's a scandal rich in irony. Auditors with the giant accounting firm Ernst & Young—the very people whose job it is to catch cheaters—themselves cheated on exams needed to keep their licenses, reports NPR. But the irony gets richer: The accountants cheated on the ethics portion of their exams. As a result, the firm must pay a $100 million fine to the SEC, which Bloomberg reports is the largest fine ever imposed on an audit firm. One reason the penalty is so big is because the federal agency says EY had received a whistleblower's report about the ethics cheating in June 2019 but didn't divulge it to the SEC when investigators—following up on a cheating scandal at a different firm—asked, per the Wall Street Journal.

"It's simply outrageous that the very professionals responsible for catching cheating by clients cheated on ethics exams of all things," says Gurbir Grewal, director of the SEC's Division of Enforcement. In a statement of its own, EY declared that "nothing [at the firm] is more important than our integrity and our ethics," adding that its "response to this unacceptable past behavior has been thorough, extensive, and effective." The cheating apparently had gone on for years, with employees sharing answer keys, according to the SEC. The matter isn't quite done yet. EY must also pay for two outside reviews, one of which will explore whether any individuals, including higher-ups at the firm, should be held further accountable. (Read more Ernst & Young stories.)

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