Ernst & Young has agreed to pay $4 million to settle charges brought by the Securities and Exchange Commission accusing the firm of violating auditor independence rules by lobbying congressional staff on behalf of two auditing clients.

The SEC said that such lobbying activities are impermissible under the SEC’s auditor independence rules because they put the firm in the position of being an advocate for those audit clients.  Despite providing the prohibited legislative advisory services on behalf of the clients, Ernst & Young repeatedly represented that it was “independent” in audit reports issued on the clients’ financial statements, according to the SEC.

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