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

Chinese Study Claims Heart Diseases Can Be Reduced By Having An Egg A Day

Asteroid mining: Reality or fiction?

3D Printing Used For Life Saving Kidney Transplant In Two Year Old At U.K. NHS

California to require solar panels for new homes by 2020

Blockchain Enables De Beers To Track Diamond From The Miner To The Retailer

Microsoft releases Windows 10’s April 2018 Update

DNA Sequencing Project Proposed For All Complex Life Forms On Earth By An Int’l Team

Facebook may start production of its own microprocessors

Long-Term Alcohol Monitoring Could Be Possible With A New Injectable Chip Developed By U.S. Researchers

Sweden Now Has The First Electrified Road In The World

World Politics

World & Politics

The British government is trying to unblock money to pay off the national debt

Ministerial Visit From India To North Korea Aimed At Strengthening Ties

What countries are the biggest losers of Trump’s Iran decision?

World's Oldest Elected Prime Minister Is Malaysia’s 92 Year Old Mahathir Mohamad

Why Is U.S. Pulling Out Of The Iran Deal A Big Deal For The World

Merkel, Macron, May call on Iran to adhere to the nuclear deal

Arab Region Driven In ‘Wrong Direction’ In Last 10 Years, Say Arab Your: Survey

German doctors demand a tax on sugar