Close

Are you in compliance?

Don't miss out! Sign up today for our weekly newsletters and stay abreast of important GRC-related information and news.

×

Status message

Start your free, no obligation 5-day trial to continue exploring with full access.

EY agrees to $11.8 million settlement with SEC on failed audits

Tammy Whitehouse | October 18, 2016

In another enforcement blow to Big 4 firm EY, the Securities and Exchange Commission has settled charges at a price tag of $11.8 million that the firm and two partners repeatedly ignored red flags in tax accounting at Weatherford International, enabling concealment of earnings-inflating fraud for several years.

Weatherford and two employees settled earlier with the SEC and agreed to pay $140 million that will be combined with the EY penalty and returned to investors. The SEC says Weatherford tax officials James Hudgins and Darryl Kitay made numerous post-closing adjustments to fill gaps and meet the company’s previously disclosed effective tax rate, or the average rate a company pays on its pre-tax profits. The activity continued over at least four years, leading to three separate restatements beginning in 2011.

The latest...

Buy this article for $49, or subscribe to Compliance Week for a month at $149 and get unlimited article access for 30 days.