FRC fines EY £1.2m for Made.com audit failures.
The Financial Reporting Council said on Tuesday that it has fined EY and a partner at the accountancy firm £1.2m for failures related to its audit of online furniture retailer Made.com.
Source: Sharecast
The accounting regulator said it fined the company £1.2m, while lead partner Julie Carlyle - who signed off the FY21 audit report - was fined £49,000.
The FRC said that EY and Carlyle had failed to perform "adequate procedures to assess the accuracy and reliability of management’s models, including insufficient challenge of key assumptions and inadequate evaluation of downside scenarios".
They had also failed to obtain sufficient appropriate audit evidence regarding the recoverability of the deferred tax asset.
Executive Counsel Penrose Foss said: "In this case the auditors relied on management’s forecasts without applying sufficient challenge or carrying out adequate testing to obtain sufficient evidence.
"Absent such challenge and evidence, there is a heightened risk that financial statements present an inaccurate picture of a company’s financial position."
Made.com entered into administration in November 2022.
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