The US Securities and Exchange Commission (SEC) is investigating claims that Ernst and Young (E&Y) broke rules on auditor independence, according to Reuters.
It is alleged that Washington Council Ernst & Young, the firms lobbying unit, worked for the firm’s audit clients including Amgen, CVS Caremark and Verizon Communications, despite rules banning auditors from serving in an advocacy role for clients.
It is not clear how far the SEC has proceeded with the investigation, which is not public, or whether it could result in civil charges being filed against the firm. SEC rules do not definitively say whether lobbying impinges on an auditors independence, as they are primarily focused on legal advocacy.
E&Y spokeswoman told Reuters that the firm would not comment on whether it was under investigation, but said: "All of our services for audit clients undergo considerable scrutiny to confirm they are consistent with applicable rules".
The SEC declined to comment.
E&Y was previously suspended from accepting audits for six months in 2004 and issued a cease-and-desist order, following a violation of independence rules, when the firm were in a joint venture with software provider PeopleSoft while carrying out audit work.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalData
