OSC Alleges Breach of Ontario Securities Act Against Ernst & Young LLP
TORONTO, Dec. 3, 2012 /CNW/ - Staff of the Ontario Securities Commission (OSC)
today issued allegations against Ernst & Young LLP, former auditors of
Sino-Forest Corporation (Sino-Forest).
OSC Staff allege that Ernst & Young breached the Ontario Securities Act by
failing to conduct their audits in accordance with relevant industry
standards. The audits related to the 2007, 2008, 2009 and 2010 consolidated
financial statements of Sino-Forest.
"Our investigation into Sino-Forest is a complex international investigation,
and a major focus has been on whether gatekeepers such as auditors and other
corporate advisors properly performed their role in protecting investors,"
said Tom Atkinson, Director of Enforcement. "Investors rely on auditors to
conduct their audits in accordance with professional standards, particularly
when foreign companies are listing on Canadian exchanges. If auditors fail to
abide by Canadian auditing standards and securities laws, we will hold them
In the Statement of Allegations, OSC Staff allege that Ernst & Young failed to
perform sufficient audit work to verify the ownership and existence of
Sino-Forest's most significant assets. OSC Staff also allege that Ernst &
Young failed to undertake their audit work on Sino-Forest with a sufficient
level of professional skepticism.
On May 22, 2012, the OSC issued allegations of fraud against Sino-Forest and
former senior executives. Those proceedings are ongoing.
The mandate of the OSC is to provide protection to investors from unfair,
improper or fraudulent practices and to foster fair and efficient capital
markets and confidence in capital markets. As part of its review of emerging
market issuers, the OSC recently issued an Issuer Guide for Companies
Operating in Emerging Markets that summarizes its expectations for reporting
issuers listed on Canadian exchanges with significant business operations in
For Media Inquiries:
Carolyn Shaw-Rimmington Manager, Public Affairs 416-593-2361
Alison Ford Media Relations Specialist 416-593-8307
Follow us on Twitter:OSC_News
For Investor Inquiries: OSC Contact Centre 416-593-8314 1-877-785-1555 (Toll
SOURCE: Ontario Securities Commission
To view this news release in HTML formatting, please use the following URL:
CO: Ontario Securities Commission
-0- Dec/03/2012 16:29 GMT
Press spacebar to pause and continue. Press esc to stop.