The U.K. Financial Reporting Council (FRC) announced Thursday the launch of two separate investigations regarding audits performed by Big Four firm EY.
The regulator said it is reviewing EY’s work at British e-commerce company Made.com Group for the financial year ended December 2021. The FRC is also probing EY’s FY2021 audit at an unnamed company for breaches of fee cap requirements set out in the regulator’s 2019 ethical standards guidance.
The investigations, approved by the FRC’s conduct committee in March, each only relate to the firm and not individuals at this time. The regulator provided no further specifics regarding either probe.
“We will be fully cooperating with the FRC during their inquiries. It would be inappropriate to comment further at this time,” an EY UK spokesperson said in an emailed statement.
Trading in Made.com’s shares were suspended in November as the online furniture retailer neared collapse. It would enter administration that same month.
The company, founded in 2010, boomed in popularity during the Covid-19 pandemic and went public on the London Stock Exchange in June 2021. Made.com’s fortunes reversed last year amid decline in consumer spending, rising import costs, and continuing supply chain pressures; its brand, website, and intellectual property were sold to Next Retail Limited upon entering administration, while its workforce of more than 500 employees was not retained.
The investigations by the FRC are the second and third into EY audits announced this year. The regulator in January said it would probe the firm’s work at Veolia subsidiary Stirling Water Seafield Finance for the year ended December 2019.
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