September 19, 2016

Public accounting firm Ernst & Young will pay $9.3 million to settle charges that two of the firm’s audit partners maintained inappropriately close personal relationships with clients and violated rules that ensure firms maintain objectivity and impartiality during audits.  SEC investigations found that Gregory S. Bednar, the senior partner on an engagement team for the audit of a New York-based public company, maintained an improperly close friendship with its chief financial officer, and Pamela Hartford, a different partner serving on an engagement team for the audit of another public company, was romantically involved with its chief accounting officer, Robert Brehl.  Ernst & Young misrepresented in audit reports issued with the companies’ financial statements that it maintained its independence throughout these audits.  SEC

Tagged in: Accounting Fraud, Financial Institution Fraud,