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The US audit regulator has penalized the Dutch branches of Deloitte, PwC, and EY with a collective fine of $8.5 million after uncovering that “hundreds” of employees engaged in cheating on internal training assessments, which included ethics tests, marking the latest scandal to hit the Big Four accounting firms.

The Public Company Accounting Oversight Board reported that employees, partners, and even some senior leaders at the firms were involved in the improper sharing of answers or collaborating on these assessments, which are essential for meeting internal training and professional education standards.

This enforcement action follows last year’s incident where KPMG Netherlands was fined $25 million for widespread answer-sharing among more than a hundred staff members, including its head of assurance, and for providing misleading information to regulators about the situation.

The PCAOB said it found cheating on tests that were designed to ensure staff were up to date on audit and accounting standards and understood professional ethical requirements, with the conduct persisting from at least 2018 to 2022. The firms said punishments for individuals ranged from written warnings to firings.

At Deloitte Netherlands, the PCAOB said that “a member of the firm’s executive board serving as the firm’s chief quality officer resigned in October 2023 after the firm discovered that he had received the answers to a mandatory test shortly before taking the test”.

A PwC Netherlands partner had also stepped down from “a senior leadership role after the firm discovered that the partner and another colleague had met together while taking a mandatory test”, the PCAOB said.

US regulators began uncovering widespread test cheating at the Big Four in 2019, but it was years before many firms implemented policies aimed at stamping out the practice, according to the PCAOB filings.

It has now found instances at all of the Big Four firms and across the world, from the US to the UK and China, levying tens of millions of dollars of fines.

“The PCAOB will not allow impaired ethics to threaten the integrity of our capital markets,” its chair Erica Williams said in a statement.

The three Dutch firms fined on Wednesday were given credit, the agency said, for recent policies making it clearer to staff what is expected of them, as well as the firms’ co-operation with its investigation.

The Dutch audit regulator will also impose a supervision programme for monitoring the three firms’ compliance and “exploring further appropriate changes to firm culture”.

PwC and Deloitte would pay civil penalties of $3mn, while EY would pay $2.5mn, the PCAOB said.

EY Netherlands said it had taken “extensive actions to reinforce our culture of compliance, ethics and integrity”, while Deloitte said it had taken “appropriate disciplinary measures” and would work with the Dutch Authority for the Financial Markets to implement changes.

PwC Netherlands said it had imposed a range of sanctions on those found to be involved, including written warnings, financial penalties, demotions and exits from the firm. “This undermines public trust in the organisation,” said Chris Buijink, chair of the firm’s supervisory board. “We must learn from this.”