Ernst & Young (EY) has been hit with a multi-million pound fine for accounting misconduct.
The firm was fined £2.75 million and Julian Gray, senior statutory and audit engagement partner, received a £90,000 fine after admitting misconduct in relation to the audit of the financial statements of Tech Data Limited (formerly known as Computer 2000 Distribution Limited), for the financial year ended 31 January 2012.
EY, which received a reprimand, paid a discounted £1.8 million after the fine was adjusted for 'mitigating factors'.
The decision follows the conclusion of an investigation by the Executive Counsel to the Financial Reporting Council (FRC), which commenced in August 2014.
EY will also pay £225,000 to cover the Executive Counsel's costs.
Both EY and Gray, a member of the Institute of Chartered Accountants in England and Wales (ICAEW), admitted their conduct fell significantly short of the standards reasonably to be expected of a member and a member Firm. They accepted that they failed to act in accordance with the ICAEW's Fundamental Principle of Professional Competence and Due Care.
The FRC said the misconduct related to the three areas: 'Failures to obtain reasonable assurance about whether the financial statements as a whole were free from material misstatement, failures to obtain sufficient appropriate audit evidence and failures to exercise sufficient professional scepticism.'