Daily Management Review

Ernst & Young fined $12 mln


10/19/2016


US authorities have fined British auditing and consulting corporation EY (Ernst & Young) for systematic errors during audit of oilfield services company Weatherford International. The latter artificially inflated its financial performance.



Dr. Avishai Teicher
Dr. Avishai Teicher
US Securities and Exchange Commission (SEC) fined EY $ 11.8 million for experts of one of the world’s leading auditing firms supposedly "did not notice" publication of false financial statements from oilfield services company Weatherford International.

According to SEC’s estimation, in a period from 2007 to 2012 Weatherford International overstated figures on its earnings by a total of $ 900 million. In its report, the regulator says that if employees of Ernst & Young would have really followed high standards of audit, they could be able to notice falsification of the oilfield service company’s statements back in 2007.

At the end of September 2016, US Securities and Exchange Commission fined Weatherford International $ 140 million for the abovementioned accounting fraud.

This year, SEC has already brought a charge against the consulting company. Ernst & Young was fined $ 9.3 million for the fact that two of its employees have entered into a romantic relationship with clients, reported Financial Times.

According to the newspaper, SEC fined Ernst & Young for two episodes of violations. First, a senior auditor of EY team, conducting financial audit of a public company in New York, have developed "too close" friendship with financial director of the audited company. He also spent $ 100 thousand for corporate entertainment.

In the second case, another auditor of Ernst & Young’s team entered into a romantic relationship with chief accountant of the audited company. Securities and Exchange Commission believes that management of EY knew about the violations, but did nothing to correct them.

EY’s representative told the FT that these employees are no longer working for the company.

The US is a key market for the consulting company. EY’s revenue there numbered $ 11.2 billion, an increase over the previous fiscal year to 12.5%. This is a record figure for the last decade. Ernst & Young has steadily strengthened its position in the country, not only in all areas of services, but also across all sectors and throughout the US. The company also considers the UK another leader in the growth of revenues in the developed markets. This is primarily obliged to attracting new major audit clients, as well as to increasing volumes of Transaction Advisory Services, Tax and Legal Services.

source: ey.com, reuters.com






Science & Technology

Artificial Intelligence Helps NASA Find An 8th Planet In Orbit Of A Distant Star

Australian Research Success Could Mean Shatterproof Cell Phones Could Soon Be A Realityv

Top ten hi-tech events of the year

Tesla Considering Designing And Developing AI Chips On Its Own To Support Its Auto-Pilot Project

Verizon to introduce 5G in five American cities in 2018

Airbus, Rolls-Royce, Siemens to create an electric aircraft

Study Finds Treatment Efficacy Could Be Sacrificed For Reduced Side Effects In Cancer Therapies By Patients

Some Information About Their Self-Driving Car Research Has Been Disclosed By Apple Scientists For The First Time

A Massive Data Breach Was Covered Up By Uber By Paying Up Hackers

A City Is Can Be Converted To A Living Organism, Showcases China’s Huawei

World Politics

World & Politics

Phase Two Of Brexit Talks, Announced On Friday, Would Be Tough, Analysts Say

Elections in Italy: the last chance of Eurosceptics?

15 countries with the highest level of organized crime

Athens agreed with international lenders

EU Pressure Reportedly Forces UK To Bow Down, Could Agree To Pay £50bn For Brexit Divorce

$1 Billion Is The Price For Freedom For Arrested Saudi Prince In Corruption Crackdown: Reports

U.S. Capital Washington Appears To Be In Range Of The Latest Missile Launched By North Korea

Ten biggest fears of millennials