EY failed to identify going concern issues, did not demonstrate adequate levels of professional scepticism and did not challenge management claims and assumptions.

At the time of the audits, Thomas Cook was heading towards bankruptcy with significant debts upwards of £1.1bn and a goodwill balance of £2.8bn amid a backdrop of deteriorating trading performance.

The sub-standard work related to EY’s audits of the financial statements for year ends 30 September 2017 and 2018. The FRC investigation found that ‘the information presented in the FY17 and FY18 financial statements in relation to goodwill was not fully reliable and understandable as required by the applicable financial reporting framework’.

The