PwC and KPMG face probe over Stobart crash

THE accountancy watchdog has launched yet another inquiry into PwC and KPMG – this time over their audits of Eddie Stobart Logistics.

The green-and-red liveried lorry company almost tumbled into administration last year, after revealing several million-pound errors in past accounts.

It was saved by the private equity firm Dbay Advisors, which now owns a majority stake in the firm.

But investors and savers who owned shares in Eddie Stobart Logistics were left disappointed as the value of their stake plunged dramatically.

Shares are still 90pc lower than they were a year ago.

The Financial Reporting Council (FRC) has said that it will begin two probes. One will be into KPMG’s audit of Eddie Stobart for the year to November 2017, and the other will look into PwC’s audit the following year.

The investigations come as the latest blow for Britain’s Big Four accountants, which include EY and Deloitte as well as PwC and KPMG.

The FRC is currently working on eight disclosed investigations into audits which have been completed by the Big Four, of companies ranging from travel firm Thomas Cook to outsourcer Carillion.

KPMG and PwC both said they would co-operate fully with the watchdog’s investigations into Eddie Stobart audits.

PwC also began an overhaul of its audit department last year to improve quality.

But the sector has come under pressure to implement a more radical reform.

A report by Sir Donald Brydon last year recommended that the audit industry should be entirely separated from accounting.

And other experts have called for a break-up of the Big Four firms.

Shares in Eddie Stobart Logistics, which now owns less than half of the actual operating company following the Dbay rescue, edged up 5,6pc, or 0.45p, to 8.55p.