By Raman Jokhakar, Tarunkumar Singhal, Chartered Accountants
fiogf49gjkf0d
New Page 1
66 SEC sanctions E&Y.
Ernst & Young LLP, one of the so-called Big Four
accounting firms, agreed to forfeit more than US $ 2.9-million to settle U.S.
regulatory claims that it compromised its independence while auditing three
companies.
The firm “engaged in improper professional conduct”
after agreeing in 2002 to create an audio series of recorded interviews with
industry leaders in collaboration with Mark Thompson, a board member for three
of its clients, the Securities and Exchange Commission said in a statement on
Wednesday. It didn’t identify the companies.
Best Buy Co., the largest U.S. electronics dealer,
announced plans in 2004 to drop Ernst & Young as its auditor after learning
Thompson, a member of its audit committee, had a separate relationship with the
accounting firm. Thompson earned about half his income by coaching Ernst & Young
partners to conduct talk show-style interviews for its ‘Thought Leaders Series’
of compact discs, the SEC said.
The regulator also cited Ernst & Young’s Chief
Operating Officer, John Ferraro, for allowing the violations. He settled by
pledging to refrain from similar misconduct in the future. Thompson settled by
agreeing to forfeit US $ 123,900.
The firms, like the other defendants in the case,
didn’t admit or deny wrongdoing. Ernst & Young is giving up almost US
$ 2.4-million in audit fees, plus interest.
(Source : Internet Newswire, 6-8-2008)
