EY accountancy giant type of behaviour assignment

This is a paper that is focusing on the EY accountancy giant type of behaviour assignment. The paper also provides a brief description for the case scenario to use in writing the assignment.

EY accountancy giant type of behaviour assignment

Question 1

Accountancy giant EY covered up evidence after a gang used black market gold to launder dirty money. According to a recent BBC documentary highlighting the role of the professional services sector in financial crime.
The documentary by BBC Panorama and French media company Premières Lignes claims that EY failed to report that a shipment of gold bars had been disguised as silver to avoid export limits on gold. According to the programme EY’s lead auditor in Dubai, Amjad Rihan. He wanted to report the suspicious activity but was told not to by his superiors. A compliance report was also rewritten by EY to cover up the crime, the documentary claims.

EY denies the allegations and said it delivered its findings to the relevant regulator in Dubai. Meanwhile, Rihan is taking EY to court, arguing he was forcefully out of the company after he identification of the violations.  In a related incident, EY allegedly failed to report evidence of smuggling after conducting a review into a company’s supply chain compliance. The BBC claims Renade International, which was on ownership by a member of a crime gang which collects cash from drug dealers.

EY accountancy giant type of behaviour assignment

When EY was asked to conduct a review of the refinery’s supply chain compliance it is discovering it had paid out a total of $5.2bn in cash in 2012. However, failed to report the suspicious activity to the money laundering authorities. $146m of the cash allegedly went to Renade Interational.
Meanwhile, a report by campaign group Transparency International published last week names EY. Alongside other accountancy firms and legal practices, in case studies of what it describes as money laundering.

According to the report, 81 law firms ‘unwittingly or otherwise’ helped acquire assets and entities used to obtain, move and defend corrupt or suspicious wealth. It also claims 56 law firms were involve in ‘suspicious wealth’ property transactions worth £3.2bn.
Bambos Tsiattalou, partner at criminal and civil litigation firm Stokoe Partnership Solicitors, said: ‘Auditing firms need to adopt a more risk-based approach to money laundering in future. This is a systemic issue and, as such, requires a systemic response. Nowadays, money can easily move across borders, particularly within the EU’s single market. Therefore, any effective regulatory response must be both systemic and transnational.’  October 2019.


a)      This type of behaviour is increasingly view as a cause for concern by the accounting profession and commentators. What types of risk may have influenced  EY behaving in this way?                                                                                                                        (10 marks)
b)      Should regulators step in to force companies to behave in a more responsible manner.
(7 marks)
c)       Using Kohlberg’s CMD scale, at what level of moral development do you think EY is operating at? What should they do to make their behaviour more socially acceptable?                                                                               (8 marks)