SEC Fines Ernst & Young $4 Million For Improper Advocacy

The Securities and Exchange Commission (SEC) has reached a $4.07 million settlement with Big 4 auditor Ernst & Young for improper advocacy relating to the political activities of one of its subsidiaries. The fine includes the disgorgement of $1.24 million, $2.48 million in penalties, and pre-judgement interest, the regulator announced today. Ernst & Young represented itself as ‘independent’ despite advocacy services “Auditor independence is critical to the integrity of the financial reporting process.  When an auditor acts as an advocate for its audit client, that independence is compromised,” said Scott W. Friestad, associate director in the SEC’s Division of Enforcement. …