“The audit profession is a position of trust and there’s an irony where you’ve got auditors seeking to cheat on ethics exams and that sort of thing.”
US regulators fined EY a record $100mn in June after hundreds of staff shared answers or cheated on an ethics exam and the firm then failed to report the violations.
PwC’s Canadian business was fined in February for cheating by 1,200 staff on internal tests and KPMG was forced to pay a $450,000 penalty last year for similar misconduct.
KPMG’s US business was separately fined $50mn in 2019, partly for answer sharing by auditors, some of whom also manipulated computers so staff would pass even if they scored less than 25 per cent.
Rapson said responses to the FRC from the Big Four firms — Deloitte, EY, KPMG and PwC — and their biggest mid-tier competitors BDO, Grant Thornton and Mazars had revealed examples of cheating at a “handful” of firms in the UK.
She added that the FRC was continuing its inquiries into the issues reported to it by the firms.
The biggest case of cheating in the UK to date involved hundreds of KPMG staff on training tests between at least 2018 and 2021, which has already resulted in a fine by the US audit regulator after the firm self-reported the misconduct. US regulators frequently fine overseas auditors responsible for checking the accounts of subsidiaries of American companies.