E&Y fined and reprimanded over audit work

A SEVERE REPRIMAND has been issued against Ernst & Young, along with fine and costs of £50,000, by the ICAEW investigation committee over its audit work.

The firm issued unqualified audit reports over the course of several years for a company of which it had failed to obtain appropriate evidence of transactions the business had entered into, including details of millions of pounds in trade debtors and work in progress in the client’s accounts.

E&Y agreed to a £40,000 fine and £10,055 in costs.

Other disciplinary findings include a fine and exclusion from membership for Roy Trigger, of Hemel Hempstead. Trigger was found to have dishonestly appropriated funds from a client account.

Chris Ford, former finance director Torex subsidiary XN Checkout, was reprimanded by the institute for bringing the profession into disrepute. He had been convicted for conspiracy to defraud shareholders of Torex.

While such actions would normally result in exclusion from the institute, it found that his clean disciplinary record; the circumstances surrounding his actions; and the judge’s sentencing remarks which found him to be in a much less culpable position than other parties at Torex; plus his efforts for charity were among the mitigating factors to enable him to retain his membership.