EY Canada censured after 500+ professionals found sharing training answers
Canada’s audit regulator says improper answer sharing was widespread at EY from 2017 to 2020, while the firm failed to introduce monitoring designed to detect cheating until 2024.
The Canadian Public Accountability Board has publicly censured EY Canada after an investigation identified more than 500 current and former professionals who engaged in improper answer sharing on internal training assessments.
The misconduct was widespread from at least 2017 until mid-2020, although CPAB also identified incidents dating back to 2014, and further cases continuing at a significantly reduced level through 2024. The overwhelming majority of those involved were junior professionals, but the regulator said answer sharing occurred at all levels of the firm, including two partners.
Most incidents involved technical accounting courses, including EY Canada’s annual core audit training and courses covering US GAAP and IFRS. Before 2020, many of the assurance professionals interviewed by investigators described answer sharing as “common” and not a “big deal”. Some said staff collaborated openly in classrooms while completing assessments.
Controls existed — but were not monitored
EY Canada had introduced anti-cheating controls in 2017. These include warnings, attestations, randomisation of assessment questions and limits on the number of attempts employees could make. It also operated an ethics hotline.
The problem identified by CPAB was that EY Canada did not evaluate whether those controls were effective or introduce specific monitoring designed to detect answer sharing until 2024. No incidents of assessment cheating had been reported through the firm’s ethics hotline during the period.
That failure became more significant because EY Canada knew from November 2019 that EY US was conducting an internal investigation into cheating. EY US investigators had also identified an instance in which an answer key had circulated among EY Canada professionals and subsequently passed information about potential Canadian answer sharing to EY Global.
CPAB found that EY Canada nevertheless did not investigate whether its own assurance professionals were improperly sharing answers or assess whether its existing controls were working. Firm leadership concluded additional action was unnecessary because controls and reporting mechanisms were already in place and no cases had been reported through formal internal channels.
The Canadian findings follow the much larger US enforcement case that resulted in EY US paying a $100 million SEC penalty in 2022. The SEC found that audit professionals had cheated on CPA ethics exams and continuing professional education courses and that EY had made a misleading submission during the regulator’s investigation.
EY faces two years of regulatory oversight
CPAB determined that EY Canada breached applicable quality-control requirements and the CPA Code of Professional Conduct, including by failing to detect the widespread answer sharing and failing to establish monitoring capable of determining whether its controls were effective.
Under the settlement, EY Canada will be publicly censured and must appoint an independent external consultant to oversee its remediation. The consultant will report to CPAB for 20 months and deliver a final assessment within 24 months. EY must also complete a cultural assessment, strengthen its policies and controls and submit quarterly reports on the results of its monitoring programmes.
Those monitoring programmes are required to examine email and Microsoft Teams communications for indications of potential cheating and may use AI-enabled tools to do so.
EY Canada must also pay CPAB an unspecified monetary assessment covering the regulator’s costs of monitoring compliance with the enforcement order. CPAB said it took into account the firm’s continuous cooperation, its extensive internal investigation and remediation already undertaken, which has included terminations, financial penalties, additional training and written reprimands.
EY Canada entered the settlement without admitting or denying CPAB’s factual findings.
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