Cheating on Ethics Exams

[Lee B]

"Ernst & Young, one of the top accounting firms in the world, is being fined $100 million by federal regulators after admitting its employees cheated on their ethics exams.

For years, the firm's auditors had cheated to pass key exams that are needed for certified public accountant licenses, the Securities and Exchange Commission found. Ernst & Young also had internal reports about the cheating but didn't disclose the wrongdoing to regulators during the investigation.

"It's simply outrageous that the very professionals responsible for catching cheating by clients cheated on ethics exams of all things," Gurbir S. Grewal, director of the SEC's Enforcement Division, said in a release."

After Enron, Worldcom and Global Crossings should we be surprised.

The pressure on partners in large CPA Firms to obtain and keep clients apparently creates a corrosive atmosphere

[Gail in Virginia]

Of all the exams to cheat on....

[jklcpa]

This makes me really angry, because aside from the potential harm to the public, the programs and monitoring that came about because of previous ethical violations actually costs me a lot of money in peer review fees and annual enrollment fee into the program that administers those reviews. 

[Lee B]

IMHO, problems tend to arise when CPA Firms are providing multiple services to clients i.e., Auditing, Consulting and Tax Planning/Preparation,

because conflicts of interest develop which can result in bad decisions being made.

[Medlin Software, Dennis]

What a message to send to their clients.  Wonder how they will "spin" this one.  Totally agree about having all eggs on one basket leads to cracked eggs...

[Lee B]

Here's the spin:

"Because it's their job to hold others accountable, Ernst & Young — one of the "big four" accounting firms — says it holds itself to a high standard of ethics. In fact, the firm's entire global code of conduct is based on an "ethical" framework.

"At EY, nothing is more important than our integrity and our ethics. These core values are at the forefront of everything we do," Brendan Mullin, a spokesperson for Ernst & Young, said in an email to NPR. "Our response to this unacceptable past behavior has been thorough, extensive, and effective."

Many of the employees interviewed during the federal investigation said they knew cheating was a violation of the company's code of conduct but did it anyway because of work commitments or the fact that they couldn't pass training exams after multiple tries."

[Lee B]

"In February, a U.S. accounting watchdog fined PricewaterhouseCoopers’s Canadian partnership $750,000 for weak controls that saw more than 1,200 employees participate in “improper answer sharing” in internal tests from at least 2016 to early 2020. Rival Big Four auditor KPMG paid a $50 million penalty in 2019 after the SEC found it had used stolen information to prepare for regulatory inspections, while some of its auditors “manipulated an internal server” to lower the pass mark in training exams."

Surprise, Surprise !

[Catherine]

Hey, if one can fake ethics and honor, the sky's the limit!

Most of the "ethics" taught is nonsense and easily gamed for those of a mind to so do. Best I ever sat through was a long conversation (yes, a conversation with two instructors and a room full of 100+ tax pros) on gray areas. How to recognize when "helping a client" slowly pushes you into grayer and grayer areas (client doing this on purpose or by accident). Recognizing hidden places for conflicts of interest. 

There was nothing cut-and-dried in those two hours, and plenty of disagreement in minutiae, but it was the best and most thought-provoking ethics ever. I still think back to it and those same thought patterns have helped me recognize several gnarly situations and back out before they got too gnarly.