Six-month client ban hits E&Y
Big Four firm Ernst & Young has been banned in the US from taking on any new audit clients for six months after a judge ruled that it had violated regulations in its relationship with software developer Peoplesoft.
Link: SEC seeks E&Y client ban
Judge Brenda Murray ordered the ban, along with ordering E&Y to ‘cease and desist’ from future regulation violations and to make a payment of £950,000, following action from the Securities and Exchange Commission over the firm’s business arrangements with PeopleSoft from the mid-1990s to 2000.
While acting as the company’s independent auditor E&Y also had a business agreement over software and consultancy, which saw it installing Peoplesoft software with other companies.
The firm now has to retain a consultant to ensure that such a situation is unlikely to arise again.
E&Y has ruled out the possibility of an appeal and promised to work closely with the outside consultants and the SEC to ensure the ruling is adhered to.