E&Y fined GBP3.5mln for Stagecoach audit failings

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Big four accountancy firm E&Y has been fined GBP3.5mln for failings in its audit of bus and train group Stagecoach Group PLC (LSE:SGC) (LSE:SGC).


Industry regulator the FRC also fined Mark Harvey, the partner who worked on the accounts, GBP100,000 and issued him with a sanction.


Both fines were reduced following co-operation with the inquiry with E&Y to pay GBP2.2mln and Harvey GBP70,000.


The case related to the 2017 accounts for the transport group with failings identified in insurance claims relating to accidents, defined benefit pension scheme obligations and a provision for the East Coast Mainline railway franchise.


“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 FRC said.


E&Y added it had fallen short of the standards it sets itself in the audit but noted that no issues were raised by the FRC concerning the latest audit of Stagecoach’s figures for the year ending 2020.

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