British regulator the Financial Reporting Council (FRC) has fined EY for “serious breaches” in its audit work for travel company Thomas Cook, which collapsed in 2019.
The accounting regulator imposed the penalty for failures in audits conducted for the financial years ending in 2017 and 2018.
The regulator stated that EY and Richard Wilson, the EY audit partner overseeing those reviews, “admitted” serious failings in their review of Thomas Cook’s financial statements.
The auditing firm was given a £4.9m ($6.4m) penalty, while Wilson received a £105,000 fine.
The FRC stated that the breaches involved inadequate evaluation of Thomas Cook’s goodwill impairment and its going concern status, as well as a failure to properly assess the risks to EY’s independence during the 2018 audit.
Nevertheless, the watchdog emphasised that it was “not suggested that the breaches were intentional, dishonest, deliberate or reckless”.
FRC Deputy Executive Counsel Claudia Mortimore said: “EY and Mr Wilson’s failure to challenge robustly and to apply sufficient professional scepticism in these crucial areas led to significant breaches of auditing standards in both audit years.
“The failings in 2018 are particularly serious given Thomas Cook’s financial position and the heightened risks surrounding the audit work. EY’s remedial measures together with the programme of non-financial sanctions are designed to prevent such failures being repeated.”
Earlier in April 2025, EY began the next phase of its $1bn technology investment, integrating AI capabilities into its global assurance platform.
This move is part of the organisation’s strategy to transform audit services and enhance the audit experience for clients around the world.
