EY fined £3.5m over Stagecoach audit failures

25 Aug 2021

Big Four audit firm EY and audit engagement partner Mark Harvey have been handed a fine of £3.5m from the Financial Reporting Council (FRC) for audit failures relating to the Stagecoach audit in 2016-17

The FRC has issued EY with a sanction of £3.5m for its statutory audit for transport group, Stagecoach for the financial year of 2016-17. The fine has been discounted by 10% for mitigating factors and discounted by 30% for early payment, meaning the total sanction is £2.2m.

The firm has also received a severe reprimand and a non-financial sanction which requires EY to report to the FRC for the period of one year in respect of audit work performed in relation to onerous contract provisions, which will be determined by FRC.

For the year ended 29 April 2017, Stagecoach’s total profit before tax was £17.9m (2016: £104.4m) and net assets were £68.5m (2016: £177.8m).

Stagecoach was a new client for EY at the time of the audit.