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EY’s ‘integrity questionable’, says campaign group

An anti-corruption campaign group, Spotlight on Corruption, has written to the Crown Commercial Service asking it to review whether EY should be banned from bidding on public contracts for three years.

It comes as Spotlight said the Big Four firm has been “hit by a number of recent scandals”, citing reports that it allegedly advised a client to hide evidence of an illegal gold smuggling operation (which it denies), failed to identify an “extensive” money laundering scheme at Danske Bank, and failed to identify fraud in several firms that later collapsed, including Wirecard and NMC Health

The campaign group claimed that such instances “amount to grave professional misconduct that renders EY’s integrity questionable”, and in light of this, the firm’s “suitability” for public contracts should be reviewed. 

EY, however, has rejected the characterisation set forth by the campaign group.

A spokesperson told Accountancy Today: “We strongly dispute the characterisation of EY by Spotlight on Corruption. Nothing is more important than the quality of the services we provide at EY. 

“We work in a highly regulated industry and take our responsibilities extremely seriously. We are committed to adhering to the relevant regulatory and legal standards, as well as the EY Global Code of Conduct, and take action where we find anyone in breach of these standards.”

Nonetheless, Spotlight on Corruption is now asking the government to review EY’s suitability to bid on two upcoming cross-government framework contracts for public sector consultancy services, and for public body audit services, as well as a contract for legal services. 

It is also calling on the government to require EY to undergo an independent assessment into why misconduct has reportedly occurred and “what steps EY needs to take to ensure that misconduct does not happen again”.

It comes as the FRC undertakes an investigation into EY for its audits into NMC Health, as well as London Capital and Finance. The two companies were accused of committing serious fraud offences and later collapsed. 

The firm is also facing investigations across Europe for “major” audit failures, including the  failure to report money laundering at Danske Bank and a mishandling of Wirecard audits, where EY reportedly relied on screenshots and documents provided by a third-party trustee and Wirecard employees instead of requesting information from the banks handling Wirecard’s accounts.

In a statement, Spotlight on Corruption said: “A review of EY’s suitability for public contracts would send a clear message to EY and the wider audit sector that they must clean up their act and improve standards in order to access lucrative public contracts. 

“Banning companies for a set period of time from public contracts (otherwise known as debarment) is increasingly recognised globally as an effective tool to protect the integrity of public contracting and prevent corruption, money laundering, fraud and other misconduct.”

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