OREANDA-NEWS Ernst & Young, one of "the Big Four" accounting firms, has agreed to pay a record $100 million fine and admit that some of its employees cheated on exams required to obtain and retain Certified Public Accountant (CPA) licenses. This was reported by the U.S. Securities and Exchange Commission (SEC) which called this fine the largest in the history of audit companies.

"It is simply outrageous that the professionals responsible for detecting fraudulent activities by customers cheated on ethics exams themselves", said SEC Enforcement Director Gurbir Grewal. "It is equally shocking that Ernst & Young interfered with our investigation of these unlawful acts".

In addition to the fine, the SEC also ordered EY to take steps to prevent similar cases from happening again, including having two separate independent consultants, one of whom will evaluate the company's ethics and independence policies, and the second will review its actions for withholding information.

The case is another blow to reputation of audit firms, whose task is to verify the accuracy of financial disclosures of companies, writes The Wall Street Journal. KPMG LLP, also a member of the Big Four, was fined $50 million in 2019 for breaches of corporate ethics. Some of its auditors cheated on exams as well.

According to the SEC, in June 2019, EY received a tip from a source within the company that its employees were cheating on exams. That same month, the regulator filed charges against KPMG.

EY said in a statement that "nothing is more important than reputation and ethics of the company". The auditor notes that it does not tolerate cheating on exams and that its "response to this unacceptable behavior was large-scale, comprehensive and effective".