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Ernst & Young, auditors to pay over $10 million to settle SEC charges

Stock MarketsAug 02, 2021 04:11PM ET
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© Reuters. The logo of Ernst & Young is seen at a branch in Zurich, Switzerland October 24, 2018. REUTERS/Arnd Wiegmann/Files

(Reuters) - Accounting firm Ernst & Young LLP, a partner and two former employees agreed to pay more than $10 million to settle U.S. Securities and Exchange Commission charges they violated auditor independence rules, the agency said on Monday.

Ernst & Young, partner James Herring and former partners James Young and Curt Fochtmann interfered with a public company's selection of an auditor threatening their ability to remain objective and impartial as auditors, the SEC said.

The agency brought related charges against William Stiehl, previously chief accounting officer at the company which the SEC did not name, for his misconduct in the selection process, known as a request for proposal process.

None of the defendants admitted or denied the SEC's findings, which concerned alleged wrongdoing in 2014 and 2015.

"EY is committed to competing fairly for new business and on the basis of our qualifications and merits," and has improved training and monitoring to ensure compliance with its request for proposal policies, the company said in a statement.

Lawyers for the other defendants did not immediately respond to requests for comment.

Sealed Air (NYSE:SEE) Corp, where Stiehl had been chief financial officer, said in 2019 it terminated his employment. A company spokesperson did not immediately respond to a call for comment.

"Auditor independence is not merely an obstacle to overcome, it is the bedrock foundation that supports the integrity, transparency, and reliability of financial reporting," SEC official Charles Cain said in a statement.

Ernst & Young agreed to pay $10 million to settle the civil charges. Herring, Young, and Fochtmann agreed to pay $50,000, $25,000, and $15,000, respectively, and to temporary suspensions. Stiehl agreed to a fine of $51,000.

Ernst & Young, auditors to pay over $10 million to settle SEC charges
 

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Comments (2)
Gamer Turtle
GamerTurtle Aug 02, 2021 8:20PM ET
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auditing firms are like the bond rating firms all the way till 2008. how are they going to disclose all the wrong/bad stuff on their clients who can fire them any minute. conflict of interest is massive there. only way to regulate the industry to hold the ppl accountable instead of having settlement. that way no one dire to sign off on incomplete/inaccurate analysis.
Bret Lafrance
Bret Lafrance Aug 02, 2021 3:17PM ET
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What were theh threatening to disclose?
 
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