The Financial Reporting Council has announced an investigation into the statutory audits of the Post Office conducted by EY for the financial years 2015, 2016, 2017 and 2018.
The FRC said it would be paying attention to matters related to the Horizon IT system. And, in accordance to its remote the investigation will be focussed specifically on the role of statutory auditors in meeting the auditing standards pertained at the time and not the broader issues relating to the Horizon IT system itself.
This decision was taken at a meeting of the FRC’s Board on 13 March 2025. So as not to interfere with the Post Office Horizon IT Inquiry, the opening of this investigation follows the conclusion of the public hearings. While the Inquiry was extensive, it purposefully did not encompass the role or knowledge of external auditors in its scope. The FRC has been actively monitoring the Inquiry’s developments and awaits the formal Inquiry findings in due course.
The Post Office is not classified as a Public Interest Entity (PIE) for the purposes of audit regulation. Accordingly, oversight is typically delegated to the relevant Recognised Supervisory Body, in this case the Institute of Chartered Accountants in England and Wales (ICAEW). The FRC has reclaimed this matter given the heightened public interest considerations.
The investigation will be conducted by the FRC’s Enforcement Division under the Audit Enforcement Procedure.
- Lord Sikka has called for an investigation of the auditors many times, and again at our 2024 conference. Check out what he had to say at: https://www.youtube.com/watch?v=jkCWvJt0l6A. Nearly 14,000 people already watched ‘The Post Office Scandal: Where were the accountants?’
