UK accountants told to show how they prevent cheating in exams

·1-min read

By Huw Jones

LONDON (Reuters) - Britain's accounting regulator has told top accounting firms to show what controls they have in place to prevent cheating in professional exams, following enforcement cases in the United States and elsewhere.

EY, one of the Big Four accounting firms, had to pay $100 million last month to settle U.S. Securities and Exchange Commission charges that its auditors cheated on certified public accounting exams and that it misled the agency's investigators.

Two other Big Four firms, PwC and KPMG, were the subject of enforcement action in Canada and Australia in February and September last year respectively.

The Financial Reporting Council (FRC), which regulates accountants in Britain, said it was deeply concerned about these events and the potential impact on UK audits if such an issue was identified in Britain.

Sarah Rapson, FRC executive director for supervision, told the accounting firms in a letter that she has decided to "deepen and accelerate" discussions about how they mitigate the risk of cheating in exams.

"I am asking you to formally set out the preventative and detective controls in place at your firm to ensure that such incidents do not happen in the UK and how you obtain assurance as to the controls' effectiveness," Rapson said in her letter dated July 5 and published on Friday.

"Please provide details of controls in place in respect of both individuals in the audit practice and the wider firm," the letter added, setting a July 22 deadline for a response.

The letter was also sent to the sector's professional bodies such as the ACCA and the ICAEW, asking them about controls when a person is sitting an exam at their workplace with colleagues present.

(Reporting by Huw Jones. Editing by Jane Merriman)

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