EY being investigated over Put up Workplace auditing throughout Horizon scandal | EY

EY, one of many “large 4” accounting companies, is being investigated over the way it audited the accounts of the Put up Workplace because the postal department community wrestled with the Horizon software program scandal that resulted in a whole bunch of submit workplace operators being wrongly convicted.

The UK’s accounting regulator, the Monetary Reporting Council (FRC), mentioned it had begun an investigation into whether or not the agency met its requirements “with specific reference to issues associated to the Horizon IT system”.

The Horizon accounting software program was developed by Fujitsu and was on the coronary heart of the Put up Workplace scandal, described because the UK’s most widespread miscarriage of justice, which has been the topic of a long-running inquiry that concluded its hearings in December.

The FRC mentioned: “In order to not intrude with the Put up Workplace Horizon IT inquiry, the opening of this investigation follows the conclusion of the general public hearings. Whereas the inquiry was intensive, it purposefully didn’t embody the function or data of exterior auditors in its scope.”

It added that the Institute of Chartered Accountants in England and Wales was the recognised supervisory physique that may usually be charged with assessing the accounting on the Put up Workplace, however “the FRC has reclaimed this matter given the heightened public curiosity concerns”.

The investigation will study 4 monetary years up till 25 March 2018, the regulator mentioned.

Put up Workplace executives spent greater than £130m of taxpayers’ cash defending the corporate on the long-running inquiry into the wrongful prosecution of greater than 900 staff due to incorrect data from the Horizon laptop system. Between 1999 and 2015, department operators had been hounded for cash, jailed and even pushed to taking their very own lives by the actions of the Put up Workplace.

The long-running scandal entered the center of public debate after it was dramatised within the hit ITV collection Mr Bates vs the Put up Workplace at the beginning of final yr. A whole bunch of these accused have since been exonerated and have been urged to use for compensation.

The FRC investigation is the newest in a string of instances the place regulators have examined the conduct of huge accountancy companies.

Final Could, EY and its rival PricewaterhouseCoopers had been fined a mixed £9.3m by the FRC for a collection of failures in auditing the accounts of London Capital & Finance, the mini-bond agency whose collapse worn out the investments of hundreds of savers.

EY mentioned it took its obligations “extraordinarily critically” and can be “totally cooperating” with the FRC.