EY has significantly increased the provisions it has reserved in the UK to cover legal claims and regulatory penalties, as scrutiny of its audit work continues to intensify.
The ‘Big Four’ firm has earmarked an additional £188m to settle disputes and fines for the financial year to June 2025, the Financial Times reported, citing its latest annual report filed at Companies House.
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The figure represents a significant jump from £44m allocated a year earlier.
The level is also higher than the £179m put aside by rival KPMG (€206.78m) in 2022, ahead of its settlement with the liquidators of Carillion.
EY’s increased provisioning comes as the company faces a series of legal actions and regulatory inquiries connected to the standard of its audit work.
In February, EY resolved a closely watched £2bn High Court claim brought by the administrators of failed hospital operator NMC Health.
The case was settled for an undisclosed amount and “without admission of liability”.
EY’s latest filings do not state whether the additional £188m provision is linked to the NMC Health settlement.
In its annual report, the company described the NMC claim as “highly speculative”.
The Financial Reporting Council’s (FRC) investigation into EY’s audits of NMC Health is still under way.
EY is also subject to four other regulatory inquiries. Last year, it faced the largest number of FRC investigations among the Big Four firms, the FT added.
The filing at Companies House said that EY paid £48m against claims in the year ending June 2025.
The company did not comment on FT queries about the report.
