EY UK and its senior statutory auditor and engagement partner Julian Gray have been fined and sanctioned after admitting misconduct over the audit of Tech Data’s financial statements.
In conclusion of the investigation carried out by the Executive Counsel of the UK Financial Reporting Council (FRC) EY was to be fined £2.75m (USD $3.655m) but it was discounted to £1.8m after an adjustment for mitigating factors, also EY will pay a sum of £225,000 towards the Executive Counsel’s costs. Gray was to be fined £90,000, but this was also discounted to £59,000 due to mitigating factors.
The investigations found three areas of misconducts in Tech Data Limited’s (formerly known as Computer 2000 Distribution Limited) financial statements for the year end 31 January 2012; failures to obtain reasonable assurance about whether the financial statements as a whole were free from material misstatement, failures to obtain sufficient appropriate audit evidence, and failures to exercise sufficient professional scepticism.
EY UK and Institute of Chartered Accountants in England and Wales (ICAEW) member Gray admitted that they failed to act in accordance with the ICAEW’s Fundamental Principle of Professional Competence and Due Care.