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May 26, 2020updated 24 Feb 2021 5:39am

FRC launches investigations into KPMG and PwC over the audits of Eddie Stobart Logistics plc

By Zoya Malik

The Financial Reporting Council (FRC) has commenced two investigations into the audits of the lorry company Eddie Stobart Logistics plc for the years ended 30 November 2017 (KPMG) and 30 November 2018 (PwC).   

The investigations will be conducted by the FRC’s Enforcement Division under the Audit Enforcement Procedure.

The Financial Reporting Council said on 26 May that its enforcement division will scrutinise audits related to the lorry company's accounts for 2017 and 2018.

As reported by the FT, Eddie Stobart was forced to suspend trading of its shares in 2019 when it was discovered that its 2018 operating profits were overstated by around 4%. Following on from this, in August 2019, its chief executive Alex Laffey stepped down from his role. Teetering on collapse, the company owed £200m to the banks where in December 2019 a rescue deal was put in place led by private equity firm DBay Advisors with 49 percent of shareholding and that has instated William Stobart,  son of the founder as executive chairman.

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