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Texas Board approves Ernst & Young settlement.

The Texas State Board of Public Accountancy approved a proposed settlement resolving complaints against Arthur Young & Company and its successor firm, Ernst & Young, over audits of two savings and loan associations that subsequently failed.

The Texas attorney general's office, which represents the state board in matters involving alleged violations of the Texas Public Accountancy Act, negotiated the proposed settlement with representatives of Ernst & Young.

The board's actions arose from complaints alleging Arthur Young failed to properly perform audits of Western Savings and Loan and Vernon Savings and Loan ;from 1983 through 1986. The Federal Savings and Loan Insurance Corporation took over Western in 1986 and Vernon in 1987.

The board issued reprimands to Ernst & Young only on behalf of Arthur Young & Company.

Ernst & Young agreed to make a $500,000 contribution to the Public Accountancy Enforcement Fund established by the Texas legislature for the betterment of the public accounting profession.
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Title Annotation:Texas State Board of Public Accountancy
Publication:Journal of Accountancy
Article Type:Brief Article
Date:Jul 1, 1992
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