Ernst & Young has been fined £1.8 million by the Financial Reporting Council (FRC) watch dog after admitting to misconduct surrounding the Tech Data reports.
In 2013 Tech Data was forced to restate numbers for its 2011, 2012, and 2013 fiscal years in the UK after finding accounting “improprieties”.
A 10-month investigation led to the distributor slashing $27 million from its previously reported net profits and triggered a management reshuffle.
The outfit’s auditors Ernst & Young has now been fined by the FRC after its conduct “fell significantly short of the standards” expected of it.
EY’s senior statutory auditor Julian Gray was also fined £59,000.
In a statement the FRC said: “The admitted acts of misconduct related to three audit areas, and included failures to obtain reasonable assurance about whether the financial statements as a whole were free from material misstatement, failures to obtain sufficient appropriate audit evidence and failures to exercise sufficient professional scepticism.”
Ernst & Young was initially fined £2.75 million, but saw a reduction for agreeing to a settlement. Gray’s fine was initially £90,000, but was reduced for the same reason.
EY also paid £225,000 in legal fees.
