The FRC investigates Thomas Cook auditors

In addition to the 16,500 passengers that the agency vowed to repatriate, the UK Civil Aviation Authority (CAA) has announced that it will be repatriating a further 8,000 travellers affected by the collapse of Thomas Cook. According to the CAA, on Monday 30 September, 53 flights were in the process of being dispatched to rescue the stranded travellers.

Elsewhere, investigations into the demise of the revered travel giant continue. Following EY’s audit of Thomas Cook accounts, the Financial Reporting Council (FRC) is looking into the audit of financial statements for the year ending 30 September 2018. The FRC plans to complete its investigations within two years.

In a statement, the FRC said: “The FRC will keep under close review both the scope of this investigation and the question of whether to open any other investigation in relation to Thomas Cook, liaising with other relevant regulators to the fullest extent permissible.”

Sten Daugaard, Previously Chief Financial Officer of Thomas Cook after Bill Scott quit after less than a year in the job, raised concerns over the ‘size of exceptionals’ back in November, while Rachel Reeves, Chair of the Business, Energy and Industrial Strategy Committee, also suggested that ‘aggressive accounting methods’ had been used to ‘aid bumper pay-outs’ to company executives, and that there appeared to be an ‘apparent inability’ of auditors and regulators to curb these practices in the wider interests of shareholders, investors and the public.

Should the FRC find any evidence of wrongdoing, EY will be taken to a tribunal in the eventuality that there is no settlement.

“We can confirm that EY has been notified of the FRC’s intention to conduct an investigation into the audit of Thomas Cook Group plc for the year ended 30 September 2018,” an EY spokesperson said. “We will be fully co-operating with FRC during its enquiries. It would be inappropriate to comment further at this time.”