Financial Services

EY fined over €4m by UK accounting watchdog over Stagecoach audit

Auditing engagement partner Mark Harvey also sanctioned, Financial Reporting Council says

EY has been fined over the 2017 audit of Stagecoach.

Wed Aug 25 2021 - 08:20

Britain’s accounting watchdog said on Wednesday it has fined Ernst & Young (EY) £3.5 million (€4.09 million) over the audit of transport firm Stagecoach Group’s financial statements in 2017.

The Financial Reporting Council (FRC) said Mark Harvey, the auditing engagement partner, has also been sanctioned and fined £100,000.

EY’s fine was cut to £2.2 million pounds for admitting to the failings, with Mr Harvey’s fine reduced to £70,000 for the same reason.

There were admissions to failings in specific areas of the Stagecoach audit, including provisions for insurance claims relating to accidents, defined pension scheme obligations and an onerous contract provision relating to the eastcoast mainline railway franchise, according to the FRC.

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“Whilst it is not alleged that the financial statements were in fact misstated, in several material instances, the respondents failed to obtain sufficient appropriate audit evidence,” the regulator said.

EY did not immediately respond, while Mr Harvey could not be immediately reached for comment. – Reuters

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