U.K. Fines Ernst & Young Over Audit Failings at Stagecoach
(Bloomberg) -- The U.K.’s Financial Reporting Council fined Ernst & Young and its former partner Mark Harvey for failings in its audit of bus and train operator Stagecoach Group Plc in 2017.
The accounting firm was fined a reduced penalty of about 2.2 million pounds ($3 million) due to mitigating circumstances, the FRC said in an statement. Harvey received a reduced fine of 70,000 pounds and a severe reprimand. EY said that Harvey left more than a year ago.
“The audit failings in this case were extensive and related to a number of fundamental auditing standards,” Claudia Mortimore, the FRC’s Deputy Executive Counsel, said in the statement
EY is already under fire over its audit of Wirecard AG in Germany. The U.K. government has pledged to improve the quality of audits done by the firm and its peers following a series of past scandals, including the 2016 collapse of the shop chain BHS, whose auditor PricewaterhouseCoopers LLP was subsequently fined more than 6 million pounds.
“We have cooperated with the FRC throughout their investigation, take their findings very seriously and have worked hard to rectify the issues identified,” EY said in a statement. The firm added that no findings were raised in the FRC’s review of our most recent audit of the company for 2020.
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