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Ernst & Young Settle Lobbying Dispute

Discussion in 'General Business & Finance Discussions' started by LPH, Jul 14, 2014.

  1. LPH

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    Ernst & Young Settle Lobbying Dispute

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    Ernst & Young will pay more than $4 million to settle civil charges of compromising its independence by lobbying Congress on behalf of two companies whose books it audited. The Securities and Exchange Commission announced the settlement Monday. The SEC charged a subsidiary of Ernst & Young, Washington Council EY (WCEY).

    “Auditor independence is critical to the integrity of the financial reporting process. When an auditor acts as an advocate for its audit client, that independence is compromised,” said Scott W. Friestad, associate director in the SEC’s Division of Enforcement.

    According to the SEC:
    • WCEY improperly sent letters to congressional staff that urged passage of certain legislation and were signed by a senior executive of an Ernst & Young audit client.
    • WCEY asked congressional staff to insert language into a bill that was favorable to the business interests of an Ernst & Young audit client.
    • WCEY met with congressional staff in order to defeat legislation detrimental to the business interests of an Ernst & Young audit client.
    • WCEY asked third parties to approach a U.S. senator in order to seek support for a legislative amendment sought by an Ernst & Young audit client.
    • WCEY marked up a draft of a bill by inserting an Ernst & Young audit client’s language and sending it to congressional staff.
     

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