Tuesday, July 27, 2021

Thomas Cook auditors investigated by accounting watchdog

An inquiry has been launched by the accounting watchdog into the auditors of the collapsed travel giant Thom..

By admin , in England , at October 1, 2019

An inquiry has been launched by the accounting watchdog into the auditors of the collapsed travel giant Thomas Cook.

The Financial Reporting Council (FRC) will look at the role of the big four financial services firm EY in signing off the last set of accounts prior to the tour operator going bust.

The regulator said it would examine whether EY had acted correctly in its audit of the failed firm's 2018 figures.

Thomas Cook staff talk of their anguish

Thomas Cook's collapse last week left around 9,000 staff in the UK jobless and more than 150,000 British holidaymakers stranded abroad, sparking the largest peacetime repatriation operation.

The FRC said in a statement: "The investigation will be conducted by the FRC's enforcement division under the audit enforcement procedure.


"The FRC will keep under close review both the scope of this investigation and the question of whether to open any other investigation in relation to Thomas Cook, liaising with other relevant regulators to the fullest extent permissible."

The move comes after a parliamentary inquiry was launched into the collapse of the company by the Commons business, energy and industrial strategy select committee.

More from Thomas Cook

MPs want to look at executive pay awards and EY's role in auditing the firm's accounts.

Questions have been raised over the accounting practices at Thomas Cook.

EY, which replaced PwC as auditors in 2017, had already warned bosses they were claiming too many business costs were "one off" in a bid to show higher profits.

Firms are allowed to exclude one-off costs when reporting underlying profits, but Thomas Cook is accused of placing regular spending in this accounting column and so bolstering the numbers.

If any wrongdoing is unearthed by the FRC, it could lead to censure and a hefty fine for those responsible.

Previous investigations by the FRC have led to a £6.5m penalty fine for PwC over its audit of BHS prior to its collapRead More – Source


Leave a Reply

Your email address will not be published. Required fields are marked *