In August 2008, Ernst & Young LLP (EY) agreed to pay more than $2.9 million to the SEC to settle charges that it violated ethics rules by coproducing a series of audio CDs with a man who was also a director at three of EY's audit clients.
According to the SEC, EY collaborated with Mark C. Thompson between 2002 and 2004 to produce a series of audio CDs called The Ernst & Young Thought Leaders Series. Thompson served on the boards at several of EY's clients during the period when the CDs were produced.
What threat to independence existed in the relationship between EY and Thompson? What are the potential harms of EY or any other accounting firm of engaging in this kind of relationship?