Call for EY to be banned from public contracts

23 November 2020

Professional services firm EY should be suspended from bidding for UK public contracts due to “recurring professional misconduct”, an anti-corruption campaign group has said.

In a letter to the Crown Commercial Service, Spotlight on Corruption said alleged misconduct by EY meant it could be defined as a “high-risk supplier” and awarding the firm contracts created “unnecessary risk to the taxpayer”.

The letter said: “In our view, EY’s serious and recurring professional misconduct amounts to sufficient grounds to review whether a discretionary exclusion (under the Public Contract Regulations 2015) should apply.

“It should also trigger proper consideration of whether the firm is, as a result, a ‘high-risk’ supplier as defined in the government’s Strategic Supplier Risk Management Policy, and whether it can be considered a reliable contractor.”

Spotlight on Corruption said “awarding contracts to EY creates unnecessary risk to the taxpayer, and threatens reputational damage to the government”, and that the maximum exclusion period of three years would be a “proportionate response”.

EY has disputed its characterisation in the letter.

In the letter Spotlight on Corruption highlighted: 

  • A UK High Court ruling in April 2020 that found EY had breached the Code of Ethics for Professional Accountants during an audit of a Dubai gold refiner.
  • Three ongoing investigations into alleged audit misconduct being conducted by European watchdogs including the UK Financial Reporting Council, the Danish Disciplinary Board, and Germany’s audit regulator APAS. 
  • Regulatory fines from the past three years across Europe totalling over €23.9m for violation of audit, conflict of interest and competition rules.

A CCS spokesperson told SM: “We have acknowledged receipt of the correspondence and will respond in due course.” 

EY said: “We strongly dispute the characterisation of EY by Spotlight on Corruption. Nothing is more important than the quality of the services we provide at EY.

“We work in a highly regulated industry and take our responsibilities extremely seriously. We are committed to adhering to the relevant regulatory and legal standards, as well as the EY Global Code of Conduct, and take action where we find anyone in breach of these standards.”

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