ACC 311 -Module 1- Discussion- Accounting and Ethics
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ACC 311- Cost Accounting Module 1- Discussion: Accounting and Ethics Prof. Mark Ulrich
Hello Everyone, My name is Luisa, I am Majoring in BS ACCOUNTING. I am graduating this year in September and will quickly enroll in the MS Accounting Program. I am in the Path to obtain the CPA Licensing, that is the goal.
The Article that I chose for this discussion is the one I found under the SEC website under “Ernst & Young to Pay $100 Million Penalty for Employees Cheating on CPA Ethics Exams and Misleading Investigation”. The article was posted on the SEC website on June 28, 2022. This was considered the Largest
Penalty Imposed by SEC against an Audit Firm. The company is under investigation for the Unethical behavior of it’s auditing professionals and their cheating on the CPA Certifications and withholding evidence of its misconduct from the SEC’s Enforcement Division during the Division’s Investigation of the situation. The company admitted the facts underlying the sec’s charges and agreed to pay the $100 Million penalty and commit to undertake extensive measures to fix the firm’s ethical issues. Ernst and Young admits that over multiple years, a number of EY audit professionals cheated on the Ethics component of CPA Exams and Various continuing Professional Education courses required to maintain CPA licenses, including the ones designed to make sure that accountants can properly evaluate whether clients’ financial statements comply with GAAP. Even after an internal investigation EY did not cooperate in the SEC’s investigation regarding its materially misleading submission. Aside from paying the penalty the company is forced to retain two separate independent consultants to help remediate its deficiencies. The order finds that EY violated a Public Company Accounting Oversight Board (PCAOB) rule requiring the firm to maintain integrity in the performance of professional service, committed acts discreditable to the accounting. This was an egregious gross misconduct, because the company was forging Ethical Certifications, and continuing required certifications. These individuals are in charge and responsible of handling the Company’s
Financial Statements and if they are cheating on their own test what is it to say that they are cheating on other things or situations? What also makes it, so grave is that top Management was trying to cover and mislead investigators to the point of even interfering with the SEC’s investigation. GAAP is the standard for accountants and anyone who handles financial records, this situation goes against principles set in the GAAP, such as the Principle of Maternity and Good faith, The Principle of utmost Good Faith. Situations like these really hurt the accounting world professionals, this hurst
the validity of our professions. References
Ernst & Young to Pay $100 Million Penalty for Employees Cheating on CPA Ethics Exams and Misleading Investigation. (June 28, 2022). SEC.gov | Ernst & Young to Pay $100 Million Penalty for Employees Cheating on CPA Ethics Exams and Misleading Investigation
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