Ernst & Young hit with £2.75m fine for accounting misconduct

Accounting and auditing firm Ernst & Young (EY) has been hit with a multi-million pound fine for accounting misconduct.

The Financial Reporting Council (FRC) fined and reprimanded both EY and senior auditor Julian Gray after both admitted misconduct in auditing the financial statements of Tech Data Limited (formerly known as Computer 2000 Distribution Limited), for the financial year ended 31 January 2012.

The reprimanded frim EY, paid a discounted £1.8 million after the fine was adjusted for 'mitigating factors'.

The decision comes after the conclusion of an investigation by the Executive Counsel to the Financial Reporting Council (FRC), which commenced in August 2014.

EY will also pay £225,000 to cover the Executive Counsel's costs.

Both EY and Gray, a member of the Institute of Chartered Accountants in England and Wales (ICAEW), admitted their conduct fell significantly short of the standards reasonably to be expected of a member and a member Firm.

They accepted that they failed to act in accordance with the ICAEW's Fundamental Principle of Professional Competence and Due Care.