EY fined £2.75m over audit misconduct

As well as its reprimand, EY was fined £2,750,000, (although this was adjusted for mitigating factors and discounted for settlement to £1,800,000).

And Mr Gray, Senior Statutory Auditor and Audit Engagement Partner at the big four firm, who was also reprimanded, was fined £90,000 (also adjusted for mitigating factors and discounted for settlement to £59,000).

EY was also ordered to pay a sum of £225,000 towards Executive Counsel’s costs

The sanctions follow the conclusion of an investigation by the Executive Counsel to the Financial Reporting Council (FRC), which was announced in August 2014.

Both EY and Mr Gray admitted that their conduct fell significantly short of the standards reasonably to be expected in relation to the audit of Tech Data, which was carried out for the financial year ended 31 January 2012, and that they failed to act in accordance with the ICAEW’s Fundamental Principle of Professional Competence and Due Care.

They admitted acts of misconduct related to three audit areas, which 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.