Britain’s accounting watchdog said on Wednesday it has fined Ernst & Young LLP 3.5 million pounds ($4.80 million) over the audit of transport firm Stagecoach Group’s (SGC.L) financial statements in 2017.
The Financial Reporting Council (FRC) said Mark Harvey, the auditing engagement partner, has also been sanctioned and fined 100,000 pounds.
There were admissions to failings in specific areas of the Stagecoach audit, including provisions for insurance claims relating to accidents, defined pension scheme obligations and an onerous contract provision relating to the East Coast Mainline railway franchise, according to the FRC.
“Whilst it is not alleged that the Financial Statements were in fact misstated, in several material instances, the Respondents failed to obtain sufficient appropriate audit evidence,” the regulator said.
EY did not immediately respond, while Harvey could not be immediately reached for comment.