UK watchdog opens probe into E&Y audit of Thomas Cook books
Geneva — The UK’s accounting watchdog has opened an investigation into Ernst & Young’s (E&Y’s) audit of Thomas Cook Group’s financial statements in the wake of the collapse of the 178-year-old tour operator.
The Financial Reporting Council began the probe amid a growing political outcry over the failure in August, which cost thousands of jobs and left tourists stranded across Europe.
The big four accounting firms have come under scrutiny in the UK after the collapse of outsourcing contractor Carillion and other companies.
The watchdog is focusing on EY’s audit of Thomas Cook’s 2018 statements but said on Tuesday that it will “keep under close review the scope of this investigation and the question of whether to open any other investigation in relation to Thomas Cook,” in co-operation with other regulators.
The tour operator stopped operations immediately a week ago, stranding 150,000 customers overseas, as a £900-million rescue plan foundered when the UK government refused to provide additional financing.
UK business secretary Andrea Leadsom has asked the state insolvency service to investigate the responsibility of the company’s directors and whether any action they took may have “caused detriment” to lenders or pensions.
The Civil Aviation Authority said on Tuesday that 115,237 people left stranded by the collapse had been flown back to the UK on 530 flights in the first week of a rescue operation dubbed Operation Matterhorn. The government is refunding 360,000 people for future bookings.
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