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Thomas Cook's auditor, EY to be investigated

Tuesday 1st October, 2019

The UK's Financial Reporting Council has commenced an investigation into the collapse of Britain’s oldest travel company Thomas Cook.

The investigation will look into the company's accounts for the year ended 30 September 2018, audited by one of the Big Four accounting firms, EY.

The probe will be conducted by the Financial Reporting Council's enforcement division.

Announcing the investigation the Financial Reporting Council said; “The FRC 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.”

Thomas Cook has had three chief financial officers over the past two years, and has also faced questions about its accounting methods, according to the BBC.

Rachel Reeves, chair of the Business, Energy and Industrial Strategy Committee, said last week that there were questions to be asked about the firm's "accounting practices", with suggestions that they improved the chances of executives being paid large bonuses.

Thomas Cook reported a £1.5bn loss for the first half of its financial year for 2019, with £1.1bn of the loss due to the decision to write down the value of My Travel, the business it merged with in 2007.

The 178-year-old firm employed 21,000 staff with around 9,000 based in the UK. The collapse caused disruption to the travel plans of around 600,000 people worldwide.