EY has once again found itself parting ways with a client due to what seems to have become a recurring theme: overly intimate relationships between its employees and clients. This narrative resurfaced when EY had to withdraw as auditor for the renowned UK grocery chain Asda. The reason? A senior partner at EY had embarked on a romantic liaison with Asda’s billionaire CEO, Mohsin Issa.
The partner in question has since exited EY, highlighting that she had not been involved in Asda’s audits. Despite her assurances of compliance with all relevant policies, this situation has reignited discussions on the firm’s professional conduct.
This isn’t an isolated incident. EY’s history includes a 2014 episode where it lost its position as auditor for Ventas due to a similar inappropriate relationship and a 2016 settlement with the SEC, amounting to $9.3 million for auditor-client relationship breaches. These episodes raise concerns about the firm’s ability to maintain essential professional boundaries.
The situations that led to these concerns weren’t solely romantic. One involved an auditor accruing over $100,000 in entertainment expenses, striving to mend a strained relationship with a client through meals, sports events, and trips. Although not romantic, this too breached independence protocols.
These instances, highlighted by the SEC, underscore the significant repercussions of failing to uphold auditor independence, emphasizing the need for firms to more rigorously enforce their guidelines to avoid compromising their professional responsibilities. EY’s challenges serve as a stark reminder of the importance of maintaining clear boundaries in client relationships.
