Revocation of CPA Certificate, via default decision.

Effective March 8, 1998

During 1993 and until April 1994, Respondent was chief financial officer of Platinum Software Corporation (PSC), a publicly-traded company. Respondent participated in the recording of, or caused to be recorded, transactions for which revenue recognition was improper for the fiscal year ended June 30, 1993, and for the quarters ended September 30, 1993, and December 31, 1993. He signed Form 10-K for the fiscal year ended June 30, 1993, and Form 10-Q for the quarters ended September 30, 1993, and December 31, 1993, with full knowledge that the financial statements included therein incorporated entries that misstated revenues.

On or about June 3, 1996, the Securities and Exchange Commission (SEC) entered an Order whereby, through a settlement offer, it permanently barred Respondent from practice before the SEC and banned him from serving as an officer or director of a publicly-traded company for 10 years.

Business and Professions Code, Division 3, Chapter 1, § 5100(g) and (i).

30-day suspension of PAR Certificate stayed, with three years' probation, via stipulated decision.

Ernst & Young LLP is on probation with the following terms and conditions:

Comply with the SEC Order and fully communicate with the Board or its designees concerning compliance.

At Ernst & Young's expense, an independent third party consultant shall be engaged to conduct a practice investigation and prepare a written report to the Board, to assure the Board that Ernst & Young LLP's leadership is committed to and has implemented policies and procedures that reasonably can be expected to remedy the violations found and result in compliance with the SEC's rules on auditor independence related to business relationships with clients and with GAAS. The consultant will sample "California audits."

Provide financial and other resources required for the Board to host an educational symposium designed to provide continuing education of no less than eight hours to the profession on topics chosen by the Board and relevant to the Board's enforcement program.

Submit acceptable proof of attendance to the symposium referred to above by all of Ernst & Young LLP's attest personnel licensed in California.

Ernst & Young LLP will reimburse the Board an amount not to exceed $100,000 for its investigation and prosecution costs in this and related matters.

Disseminate decision to Ernst & Young LLP's professional personnel.

Other standard terms and conditions.

Effective September 24, 2004

Also See:

Frick, Richard L.

Ernst & Young LLP was sanctioned by the United States Securities and Exchange Commission (SEC), an action subjecting Ernst & Young's California CPA partnership registration to discipline. The SEC's Order found that Ernst & Young LLP was not independent in fact or appearance when it audited the financial statements of PeopleSoft for fiscal years 1994-1999. The SEC's sanctions included a six-month suspension from accepting new SEC audit clients, disgorgement of audit fees (+$1.6 million), an injunction against future violations, and an independent consultant report.

The SEC found independence violations arising out of Ernst & Young's business relationships with PeopleSoft created an identity or mutuality of interests.

The SEC's Order found Ernst & Young was auditing PeopleSoft's books at the same time that its International Tax Group had business relationships with PeopleSoft, including an application software partnership through which Ernst & Young entered a licensing and distribution agreement with PeopleSoft. The SEC's Order also found Ernst & Young was auditing PeopleSoft's books at the same time that Ernst & Young's Consulting Group had an Implementation Partnership with PeopleSoft. The SEC found that Ernst & Young and PeopleSoft had a "symbiotic relationship" engaging in joint sales and marketing efforts, and sharing considerable proprietary, confidential business information, and that Ernst & Young partnered with PeopleSoft to the maximum extent possible to accomplish sales and boost Ernst & Young's consulting revenues.

The Board's discipline is based upon Ernst & Young's admissions that the SEC order provides the basis for discipline of the partnership license under Business and Professions Code, Division 3, Chapter 1, § 5100 (h) and (l).

Business and Professions Code, Division 3, Chapter 1, § 5100 (g), (h), (l). California Code of Regulations, Title 16, Division 1, § 65.

Related Documents:

Ernst and Young Action

Surrendered certificate, via stipulated settlement.

Effective January 7, 2007

For the purpose of resolving the charges and allegations in Accusation No. AC-2005-11, Mr. Estrada admits he performed an audit of a foster care provider, regulated by the California Department of Social Services, that was grossly negligent.

The audit report did not conform to professional standards, the financial statements did not include all required disclosures, and the working papers did not have all required documentation.

Mr. Estrada engaged in the practice of public accountancy while his license was in inactive status.

Business and Professions Code, Division 3, Chapter 1, §§ 5100 (c) and (g), 5062, and 5050. California Code of Regulations, Title 16, Division 1, § 58.