Placeholder while article actions loadHundreds of auditors at accounting giant Ernst & Young cheated on ethics tests they were required to take to get or maintain their professional licenses, and the company withheld evidence of the misconduct from federal authorities investigating the matter, according to the Securities and Exchange Commission.In response, the SEC is imposing a $100 million fine on the company, the largest ever on an audit firm, the agency announced Tuesday.“This action involves breaches of trust by gatekeepers within the gatekeeper entrusted to audit many of our nation’s public companies,” SEC enforcement director Gurbir Grewal said in a statement. “It’s simply outrageous that the very professionals responsible for catching cheating by clients cheated on ethics exams of all things.”In a statement, Ernst & Young admitted to the SEC’s charges and said it is complying with the agency’s penalty.“We have repeatedly and consistently taken steps to reinforce our culture of compliance, ethics, and integrity in the past,” Suzanne Bouhia, a company spokesperson, said in an email. “We will continue to take extensive actions, including disciplinary steps, training, monitoring and communications that will further strengthen our commitment in the future.”The agency found that beginning in 2017, 49 Ernst & Young professionals shared or received answers to ethics exams they needed to pass to get licensed as certified public accountants. Hundreds more cheated on courses they needed to take to maintain their standing with state oversight boards, while others who didn’t participate themselves helped facilitate the behavior, the SEC said.The firm’s leaders then covered up the activity, failing to report it to the SEC after the agency asked Ernst & Young about complaints it had received and the company launched an internal investigation that confirmed the misconduct, according to the SEC. The record-breaking fine — twice the $50 million tab that rival KPMG paid the agency in 2019 over its own cheating scandal — in part reflects the gravity of the firm’s decision not to cooperate with the investigation, an SEC official told reporters.Grewal, in his statement, said it is “equally shocking that Ernst & Young hindered our investigation of this misconduct. This action should serve as a clear message that the SEC will not tolerate integrity failures by independent auditors who choose the easier wrong over the harder right.”Beyond the fine, the SEC is forcing Ernst & Young to hire two independent consultants, one to review the company’s ethics and integrity policies and the other to probe its failure to disclose its own findings.The episode is not the first time Ernst & Young auditors have been caught cheating. From 2012 to 2015, an internal company investigation found over 200 firm employees exploited a software glitch in the company’s testing platform to cheat on exams, the SEC said.At the time, the firm took disciplinary action against those employees and warned its workforce against taking such shortcuts. “Our response to this unacceptable past behavior has been thorough, extensive, and effective,” Bouhia said.She said the new requirements the SEC is imposing on the company “will reinforce the steps we have already taken in the years since these situations occurred.”Ernst & Young is the world’s third-largest accounting firm and reported a global revenue of $40 billion in its last financial year, which ended in June 2021.