Thomas Cook auditors investigated by UK accounting watchdog FRC

As per reports, UK's accounting regulator has launched an investigation into EY's audit of Thomas Cook's accounts, a little after a week when world's oldest travel firm collapsed. Financial Reporting Council has said that its enforcement division is investigating EY's audit of financial statements of Thomas Cook for year till September 30, 2018.

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FRC statement 

FRC has reportedly said that it will keep under a close review both scope of investigation and question of wher to open any furr investigation linked to Thomas Cook while also being in conjunction with or regulators to best possible extent. EY took over from PwC as Thomas Cook's auditors in 2017- both companies are UK's big four accountancy companies.  Thomas Cook earlier this year h taken £1.5bn first-half loss in May and h released its third profit warning in less than a year.

Thomas Cook h accrued £1.2bn of debt and was forced to underwrite firm's value and were forced to reduce value of its MyTravelUK pack holiday business by £1.1bn. In those particular sets of accounts, EY h cautioned that re was a significant doubt wher Thomas Cook can continue as a going concern business. On September 30, FRC h said that it h issued an updated going concern standard following a series of corporate failures in which auditors h unable to flag concerns about viability of company. w-defunct tours and travel firm has h three different finance chiefs in two years as its financial problems became grave and have come under scrutiny for its accounting methods.

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financial officer changed Accounts reporting

Sten Dauggard became Thomas Cook's chief financial officer in December 2018 as Bill Scott h quit job in less than a year after profit warning. Scott h replaced Michael Healy in January 2018 as Healy quit after 5 years in job. Daugaard h reportedly modified way Thomas Cook was reporting its accounts and h pressed for inclusion of items that h been treated as exceptional costs for years, even if paying directors and meeting banking conditions. Reports say he h told analysts in vember that when he looked at books of accounts one thing that he could immediately observe was that size of exceptional costs. FRC aims to complete investigations within two years.

(With inputs from ncies) 

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