NEW YORK: Ernst & Young's (E&Y) public posture toward an SEC investigation has evolved from initial surprise to final acceptance, following an administrative judge's April 16 ruling barring the Big Four accounting firm from taking on new public auditing clients in the US for six months.
In May 2002, when the federal securities watchdog announced its investigation of E&Y for violating auditor independence rules, the firm said in a statement it was "surprised and disappointed that the SEC has chosen to take action on this matter. Our conduct was entirely appropriate and permissible under the profession's rules."
But E&Y's response to the ruling this month was decidedly more humble. The firm said it was sorry and it wants to move on quickly.
"The sanctions are strong medicine," E&Y's statement said. "We won't fight them nor appeal the decision, because that would not be the right thing to do. We will accept the tough sanctions and work cooperatively with the SEC in implementing them."
No PR campaign has been launched because of the SEC ruling, said Charlie Perkins, E&Y's PR director.
"I think people understand this for what it is," Perkins said. "Our clients have been supportive, we've been communicating with our clients and others very aggressively, and we have tried to emphasize that the decision not to appeal was a decision that indicates our desire to move forward."
The ruling stems from E&Y's working as PeopleSoft's auditor at the same time that it was developing products with the software maker.