Ernst & Young has settled charges with the Securities and Exchange Commission for $2.9 million alleging a conflict of interest in its audits of three companies.The case involved a series of interviews that Ernst & Young distributed on audio CDs with the chief executives of various companies. The interviews were conducted by executive coach Mark C. Thompson, who was also a board member of three companies audited by the firm.
E&Y chief operating officer John Ferraro, who had met with Thompson in 2002 to plan the series, agreed to cease and desist from future violations. Thompson will forfeit $123,900 that he earned from his work with E&Y.
E&Y also agreed to improve its independence policies and procedures, and has established a new business relationship evaluation process.
