The UK accounting regulator has fined Big Four firm EY nearly £4.9mn for “serious breaches of standards” in its audits of failed travel company Thomas Cook, wrapping up a nearly six-year investigation.
The Financial Reporting Council has reprimanded EY for its audits of Thomas Cook in 2017 and 2018, including its judgments on a goodwill impairment and whether the company was a going concern.
Thomas Cook collapsed in 2019, leaving hundreds of thousands of travellers stranded abroad.
The FRC also fined the audit partner responsible for the audits, Richard Wilson, £105,000. The fines were both discounted 25 per cent for co-operation.
EY said: “We deeply regret that the 2017 and 2018 audits of Thomas Cook fell below the standards that we expect. We are committed to learning from these mistakes and have strengthened our procedures, training and guidance, as well as our global audit methodology, to address the issues identified.”
