EY to pay $100 mln to settle U.S. charges of staff cheating on accountant exams | Hacker News Reader

EY to pay $100 mln to settle U.S. charges of staff cheating on accountant exams

reuters.com

71 pointsptsneves46 comments

Open articleView on HN

Surely, everyone involved has "good intentions."

And yet, looking at this in hindsight, it reads like something straight out of Kafka's cynical mind:

1. An accounting company's staff systematically cheats on an exam for accountants.

2. The company gets caught and charged by the government.

3. The company pays a fine to settle the charges, with a bit of fanfare.

4. The company is now assumed to have changed its behavior.

5. The company suffers no other consequences.

If you replace "company" with "individual", then the entire thing makes sense - individuals (and therefore companies) should be assumed to have changed until further evidence proves otherwise (innocent until proven guilty and all that). That's why the concept of "repeat offenders" exists, and they do tend to be punished more harshly, at least in the case of individuals. So, time for an extension of that concept to corporations, as well?

Corporations are people too.

>individuals (and therefore companies)

Alright, you've lost me. Why should corporations always be treated the same as individuals?

In the US, the courts have declared corporations are people for all intents and purposes:

https://en.wikipedia.org/wiki/Corporate_personhood?wprov=sft...

that doesn't answer his question on why it should be that way. Courts have said many things over the years, doesn't make it any less of an appeal to authority logical fallacy.

The Wikipedia page that I linked provides a thorough explanation as to why corporations are considered citizens, so I do believe it directly answers the question. In this light, it was not intended as an appeal to authority.

Personally, I think the status quo is entirely and grossly unjustifiable. Citizens United needs to be overturned; corporations are not people and do not deserve the same rights as individuals. My opinion on that matter does not change the reality that they are considered such and only serves to confuse the matter.

No, they really haven't. Corporations are afforded only some of the same legal status as actual people are.

Corporations shouldn't necessarily always be treated the same as individuals, but in this case if it is believed that individuals will change then corporations will also change as corporations are an extension of individuals.

Assuming things like the tendency to increase the consequences for individuals is a good tendency, perhaps the desire is to have consequences for corporations also increase.

"Therefore" was not the right word there (although edit window has passed). "Also" would have been better. I also don't think that corporations should always be treated the same as individuals - just in some ways, and this is one of them.

Put the members of the corporation in jail rather than a token fine and then I'll consider them the same as an individual. But more often than not corporations get away with literal murder with nothing more than a fine. So no corporations are not the same, they deserve no extensions if anything they deserve to be cracked down on harder.

If you read the article EY have been ordered to retain two independent consultants in response to this.

>The SEC has ordered EY to retain two independent consultants to help remediate its deficiencies. One will review the firm’s policies and procedures relating to ethics and integrity. The other will review EY's conduct regarding its disclosure failures, including whether any EY employees contributed to the firm’s failure to correct its misleading submission, the SEC said.

And who is going to audit the independent consultants?

Why, there is another effect: now everyone knows that they were cheating at a large scale. This will, to my mind, give them less business.

The customers who want their books in utterly correct shape would shun them, because the company that cheated at exams could lie both to IRS and its own customers, and nobody wants trouble with IRS

The customers who would like to apply some shady practices to cut some costs would also shun then, because a cheater who cheated and got caught is a,loser, and who wants to hire a company to do shady things and get caught?

So no, there may be enough consequences.

Only in theory. In reality, I can't think of any company over the past decade that has seen a reduction in revenues after being fined by some regulator. Can you find even one example of a business actually declining because of some fines?

Cheated on an ethics exam.

This isn't a very serious comment, but it drives me bonkers how many monikers there are for a million. Now I have to prep my brain for the mln floating around. lol

Then in French they say “milliard” for billion. And billiard for trillion. Throws me off.

I think the old style British Billion is a million million as well, so the meaning depends on how old the text is.

Wait until you learn that the French has a different word for many other concepts too! Crazy!

Why can't they just use plain English nobody knows. \s

> Wait until you learn that the French has a different word for many other concepts too!

But it gets more interesting, they use the same words (or a very similar one) as in English to express different concepts.

"Crier" sounds like cry, but it means "to scream".

Even worse, there are "English sounding words" that mean things in French that don't exist and wouldn't make sense in English. E.g pressing is a dry cleaner, dressing is a wardrobe, footing is jogging.

Like 'cry out'.

Oh god, so it wasn't just in russian. This made me go down this rabbithole to finally figure out what's up.

I got curious about the details, and, turns out, it is related to whether the short scale or long scale system is used.[0]

Short scale is the traditional million-billion-trillion-etc. Long scale is million-milliard-billion-billiard-etc. It isn't just naming for the same thing, as billion would actually have different power across those systems (power of 9 vs power of 12).

Looks like both russia and france got their own variations of it. Russia uses short scale, but swapped the name for billion to milliard. While francophone, scandinavian, and a few other countries tend to use long scale.

0. https://en.wikipedia.org/wiki/Long_and_short_scales

As a Norwegian I can confirm it's confusing when reading numbers written in English. In Norway we use million, milliard, billion, billiard, trillion, trilliard.

But for a number such as '3 milliarder', one often writes '3.000 millioner' instead. Exactly why I don't know, but I would guess it has something to do with more accurately reflecting the size of the number. It might not be as clear that the number is 1000x the size with a simple change in the end of the word. The difference between a million and a billion is about a billion, after all.

Speaking of confusion about numbers, just wait until you see how different countries divide up large numbers. Some countries, such as Norway write one million as 1.000.000,00 while others write it as 1,000,000.00.

interestingly, Malaysia uses British/American style short scales (juta, biliun, triliun) while Indonesia uses short scale... but still retaining the old Dutch longscale just for billion (juta, milyar, triliun...)

There might be other languages where this occur as well, not just Russian and Indonesian.

In Italian it is milione/miliardo/bilione, when translating it is easy to make a mistake between the Italian bilione (10^12) and the English billion (10^9).

This is the difference between the long number system and the short number system:

https://simple.wikipedia.org/wiki/Long_and_short_scales

The long system makes vastly more sense, but in the English world we use the short system, except of course for the English themselves who used to use the long system and tragically regressed to the short system officially in the 1970's.

Of course, in my perfect world, we would use neither because we'd be using base-12: https://en.wikipedia.org/wiki/Duodecimal

Why does the long system make vastly more sense?

$1k, $1M, $1B, $1T, $1Q seem like pretty quick and easy abbreviations for all amounts of money that are commonly dealt with, at least for US or European currencies.

They both seem extremely arbitrary:

Short scale: A short n-illion equals 10^(3n + 3)

Long scale: A long n-illion equals 10^(6n) and a long n-illiard equals 10^(6n+3)

How does it make vastly more sense?

I think incrementing by a 1000 is vastly more simple than 1000 or million. It doubles the amount of names which may be useful scientifically but in a layman's world, we don't really use things past a billion.

The exact same thing (auditors cheating on ethics exams) happened at KPMG a few years ago [1]. In KPMG's case, I recall that the ethics exams had been mandated by a regulator after ethics violations had been found at the firm.

The most concerning thing about this is that public auditing firms are supposed to be the entities keeping everyone else honest. The whole financial system is based on a chain of trust that starts and ends with auditors. If you can't trust the external auditors, then you can't fully trust anything. This is the world we live in.

[1] https://www.marketwatch.com/story/the-kpmg-cheating-scandal-...

> The whole financial system is based on a chain of trust that starts and ends with auditors. I guess this would be the equivalent of certificate authorities being caught issuing non-unique or wildcard certificates.

Reminds me of the certification boot camps where you sit in rapid lectures all day and then go to your room to study all the Chinese brain dumps at night. In the morning you come back and take the test in the next room over.

What is the pass rate? I assume it's pretty high?

As someone who has had taxes done by EY, I'm not the least bit surprised.

They did my personal taxes one year, part of a larger corporate benefits deal. I was late and claimed I lost access to their online filing tool (stupid excuse). Instead of giving me a new account or password reset after 5 minutes the associate brought me a piece of paper ... with my password on it. Same I used for my emails, definitely one I set in the past. They stored it in plain text with plenty of people having access. I was shocked.

I have never seen million abbreviated as "mln" instead of "mil"... So at first I read this headline as "100 dollars minimum".

Same here. I'm used to 'MM' in this context, but 'mil' is common and clear too. 'mln' took a couple reads to understand

How are these exams performed? It's a red flag to me that it's even possible to pass exam answers around. Do the examinees surveil themselves?

They may have done what many US university fraternity organizations do. Procure a copy of test questions. With frats it's usually test questions from previous year provided by upperclassmen who have already completed the course. Many times the test questions don't change significantly year over year.

At my European top university, a database of previous exams was available for every single course, provided by the university itself.

I can't say to now, but back around 17 years ago when I took them, they moved to 100% on the computer.

You would go into one of those testing facilities, and be on the machine and be answering questions. I'm pretty sure the questions were even fairly randomized- in the sense that the person sitting next to you would not have all the same questions etc.

Which is why the results of pass/fail were not immediate, they would aggregate everyone's scores and probably do stuff for questions that were similar etc.

I may be wrong on the randomized part, but I don't recall being able to discuss any specific questions with classmates afterwards..

Anyway- perhaps things have changed from 2005 but I don't really understand how one is able to cheat on the CPA with specific questions like they are talking about.. unless it would be taking pictures/video of their test and showing that to others.. although honestly I don't even see how that would help- when I took the exams the questions are 100% what you would have expected to be asked. It's just like a practice test book, you just don't know exactly what they are going to ask.

Reply on news.ycombinator.com