September 16, 2021

EY fined 3.5 mln stg for failings in Stagecoach audit

The logo of Ernst & Young is seen in Zurich, Switzerland November 13, 2020. REUTERS/Arnd Wiegmann/File Photo

LONDON, Aug 25 (Reuters) – Britain’s accounting watchdog said on Wednesday it had fined EY 3.5 million pounds ($4.8 million) for failing to challenge financial statements in its audit of transport group Stagecoach Group’s (SGC.L) in 2017.

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

EY’s fine was cut to 2.2 million pounds for admitting to the failings, with Harvey’s fine reduced to 70,000 pounds 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 benefit pension scheme obligations, and an onerous contract provision relating to the East Coast Mainline railway franchise,…

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