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UK’s FRC launches investigation into Thomas Cook audit

The UK’s Financial Reporting Council (FRC) has launched an investigation into the audit by EY of the financial statements of Thomas Cook for the year ended 30 September 2018.

Travel company Thomas Cook collapsed at the start of last week, leading to 155,000 tourists stranded outside the UK and what has been described as the largest peacetime government repatriation effort in British history. Shortly afterwards, the FRC said that it was considering if there was any case for an investigation into the group.

The investigation will be conducted by the FRC’s Enforcement Division under the audit Enforcement Procedure.

The FRC said it will ‘keep under close review both the scope of this investigation and the question of whether to open any other investigation in relation to Thomas Cook, liaising with other relevant regulators to the fullest extent permissible’.

A spokesperson for EY said: “We can confirm that EY has been notified of the FRC’s intention to conduct an investigation into the audit of Thomas Cook Group plc for the year ended 30 September 2018. We will be fully cooperating with FRC during their enquiries. It would be inappropriate to comment further at this time.”

EY took over as the company’s auditors from PwC in 2017.

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