EY and partner Christopher Voogd have been sanctioned over the audit of Stirling Water Seafield Finance plc (SWSF) for the year ended 31 December 2019. By undertaking the audit EY exceeded the maximum 10-year engagement period for audits of a public interest entity (PIE).
EY received a fine of £325,000 along with a severe reprimand. The Big 4 firm also needs to provide a report identifying the reasons for such a basic breach of the rules.
Voogd was given a £32,500 financial sanction and severe reprimand.
Jamie Symington, FRC Deputy Executive Counsel, said: “Mandatory firm rotation is a clear requirement for auditors underpinned by company law and the FRC’s Revised Ethical Standard. It is an integral legal safeguard to provide assurance that auditors are demonstrably independent which supports trust and confidence in UK corporate reporting and audit.
“In this case, there were significant failings in relation to mandatory firm rotation requirements at both the engagement and firm level during the continuance stage, which led to EY carrying out audit work despite being ineligible. It highlights the importance of the firm having adequate quality control standards under ISQC 1, as now succeeded by ISQM 1.”
