FRC fines EY and audit partner for Made.com 2021 audit failures
The UK's Financial Reporting Council (FRC) has fined EY nearly £1.2 million and audit partner Julie Carlyle £49,000 for failures in the 2021 audit of e-commerce company Made.com Group. Both admitted to breaching international auditing standards in two areas: going concern assessment and deferred tax asset (DTA) evaluation. The FRC issued a severe reprimand and ordered them to pay investigation costs. Made.com, which joined the London Stock Exchange in June 2021, faced supply chain disruption and weaker demand in 2022, reporting a £35.3m loss before tax. EY later disclaimed its opinion on the 2022 interim statements due to material uncertainty about the company's ability to continue as a going concern. Made.com entered administration in November 2022. FRC executive director Penrose Foss criticized the auditors for relying on management forecasts without sufficient challenge or testing.
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