E&Y partners agree to audit suspension
Two partners at Big Four firm Ernst & Young have been suspended from auditing public companies for a period of four years, following a settlement with the Securities & Exchange Commission.
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E&Y partners Kenneth Wilchfort and Marc Rabinowitz settled with the SEC over allegations that they failed to detect accounting fraud at web-hosting company Cendant, the securities watchdog said in a statement.
Both partners agreed to the suspension without denying or accepting guilt over the allegations.
Wilchfort and Rabinowitz provided audit and accounting advisory services to Cendant and its predecessor CUC International.
The SEC charged the two with failing to detect that financial statements provided by Cendant and CUC did not conform to GAAP, even though they received false documents and were allegedly lied to by Cendant and CUC.
Fraud was uncovered at Cendant five years ago, following the merger of CUC with HFS. Several former company executives from CUC have since admitted that the company’s financial statements were fraudulent for more than a decade.
