Accountant EY fined £3.5m for botching its audit of transport firm Stagecoach
Accountant EY has been fined £3.5million over its shoddy audit of transport firm Stagecoach.
It was given a ‘severe reprimand’ by industry watchdog the Financial Reporting Council (FRC), and its partner Mark Harvey was handed a £100,000 sanction.
The fine was reduced to £2.2million and Harvey’s to £70,000 as they admitted their failings.
Fined: The Financial Reporting Council recorded a litany of weaknesses in EY’s 2017 audit of transport firm Stagecoach
Harvey left EY last year. The FRC recorded a litany of weaknesses in EY’s 2017 audit of Stagecoach, including failures to ‘obtain sufficient appropriate audit evidence, adequately evaluate expert evidence, apply sufficient professional scepticism and challenge management, and prepare proper audit documentation’.
But it did not find that the accounts had been mis-stated. The failings covered pension scheme obligations, provision for insurance claims relating to accidents, and an onerous contract provision in one rail franchise.
EY faces more probes into its audits of failed firms NMC Health, Thomas Cook and London Capital and Finance.
It said: ‘Regrettably we fell short of the standards we set for ourselves, and expected of us by the FRC and society.’