The Financial Reporting Council fined Ernst & Young £1.8 million for their shoddy audit work of distributor Tech Data.
This is what happened. In 2013, Tech Data revealed that there were material errors in their financials for 2011, 2012 and part of 2013. The errors were related to improper accounting of vendor sales, improper use of manual journal entries and incorrect recognition of forex currency conversion. The company’s bottom line was reduced by $27 million due to these errors.
After Tech Data’s revelation, FRC got into action and in 2014 started to look into Tech Data’s auditor E&Y’s role in the matter. Both E&Y and the audit engagement partner Julian Gray admitted that they messed up and were fined £1.8m and £90K respectively.