The Facts
Top accounting firm Ernst & Young (EY) is being fined $100M for allowing employees to cheat on their ethics exams and withholding evidence, the Securities and Exchange Commission (SEC) announced on Tuesday.
The federal regulator found that 49 employees were involved in sharing or being given answer keys for the CPA ethics exam between 2017 and 2021.
The Spin
Narrative A
The blatant fraud going on at "woke" firms is outrageous, and shouldn't have gotten to this point before being uncovered. Not only were a huge number of EY employees willing to cheat on exams, their colleagues and supervisors were aware and violated company policy by failing to report the wrongdoing. Clearly, superficial commitments to social justice and the denouncement of racism don't equate to the reliable upholding of legal and ethical standards.
Narrative B
It's promising to see the SEC take such a strong stance against financial corruption and unethical behavior. This is a record-breaking fine - double the previous largest fine of $50M KPMG had to pay in 2019 amid its own cheating scandal - and shows how seriously federal regulators now treat this type of behavior. It's reassuring that the SEC is digging into an industry-wide problem.
