The SEC yesterday ordered a hearing in 60 days – including the possibilities of sanctions against the firm – over claims E&Y violated auditor independence rules, by engaging in business with its audit client.
The watchdog alleges that from 1993 to 2000 E&Y developed and marketed a product jointly with the software company, while auditing its books.
The product called EY/GEMS was allegedly marketed by E&Y’s tax department and contained PeopleSoft proprietary source code
But the firm said it was ‘surprised and disappointed’ by the allegations, adding: ‘Our conduct was entirely appropriate and permissible under the profession’s rules.’
The debate over auditor independence reached its zenith under former SEC chairman Arthur Levitt who campaigned hard for a ban on consulting services offered by firms to their audit clients.
But it has reared its head again following revelations that Andersen provided both auditing and consulting services to the collapsed energy giant.
Yesterday the European Commission issued new guidelines recommending auditors should not offer other services to their audit client as it could jeopardise independence.
Revenue and profitability growth in on the rise for CPA firms, found a survey from the American Institute of CPA’s and its subsidiary CPA.com
The second largest improvement in ‘significant’ levels of financial distress since the EU Referendum was in professional services, found research from Begbies Traynor
Carter Backer Winter has acquired Edwards Financial Services, expanding its financial planning department
New growth opportunities in Aberdeen, North East Scotland, are being invested in by Grant Thornton