Cook’s auditors rapped for £50m bill
THOMAS Cook’s auditors are to be investigated over its collapse as it emerged they took almost £50million in fees since 2008.
Accountancy regulator the Financial Reporting Council announced it had begun a probe into Ernst & Young’s (EY) oversight of Thomas Cook’s 2018 finances.
The FRC hinted that its review could be widened.
Analysis found how EY and Price water house Coopers (PwC) netted a fortune from the travel giant. It went bust last Monday, hitting nearly a million holidaymakers and triggering 6,000 job losses, with another 3,000 set to go.
MP Rachel Reeves, chair of the Commons Business Select Committee, has vowed to grill EY and PwC.
EY replaced PwC as Thomas Cook’s auditors in 2017. It was paid £4million in its first year, and £3million for 2018. Of the £4million, nearly £1million was non-auditing work for a bond issue and half-year results.
PwC was Thomas Cook’s auditor from 2008 through to 2016 as Thomas Cook paid out £41.6million – but £17.6million of that was for non-audit work.
Ms Reeves said: “Audits seem too often to be the route to milking the cash-cow of consultancy.”
EY said: “We will be fully cooperating with FRC.” PwC refused to comment.