Securities Law Prof Blog

Editor: Eric C. Chaffee
Univ. of Toledo College of Law

A Member of the Law Professor Blogs Network

Thursday, February 9, 2012

Ernst & Young Settles PCAOB Disciplinary Order for Audit Failures

The Public Company Accounting Oversight Board announced a settled disciplinary order censuring Ernst & Young LLP, imposing a $2 million civil money penalty against the firm, and sanctioning four of its current and former partners for violating PCAOB rules and standards.  The $2 million civil money penalty is the Board's largest civil money penalty to date. The respondents agreed to settle without admitting or denying the Board's findings.

The order related to three E&Y audits of Medicis Pharmaceutical Corporation, and a consultation stemming from an internal E&Y audit quality review of one of the audits.  James R. Doty, PCAOB Chairman, summarized E&Y's failings:

These audit partners and Ernst & Young — the company's outside auditor for more than 20 years — failed to fulfill their bedrock responsibility. The auditor's job is to exercise professional skepticism in evaluating a public company's accounting and in conducting its audit to ensure that investors receive reliable information, which did not happen in this case.

http://lawprofessors.typepad.com/securities/2012/02/ernst-young-settles-pcaob-disciplinary-order-for-audit-failures-.html

Other Regulatory Action | Permalink

TrackBack URL for this entry:

http://www.typepad.com/services/trackback/6a00d8341bfae553ef0168e70eb770970c

Listed below are links to weblogs that reference Ernst & Young Settles PCAOB Disciplinary Order for Audit Failures :

Comments

Post a comment