FRC Closes Investigation into Ernst & Young LLP Audit

FRC News

Published February 24th, 2026

Detected March 6th, 2026

Summary

The UK's Financial Reporting Council (FRC) has closed its investigation into audits conducted by Ernst & Young LLP for a Public Interest Entity for the years 2021 and 2022. The FRC's Executive Counsel decided not to bring enforcement action against the firm.

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What changed

The Financial Reporting Council (FRC) announced the closure of its investigation into Ernst & Young LLP (EY) concerning audits of a Public Interest Entity's financial statements for the years ended December 31, 2021, and 2022. The investigation, opened under the Audit Enforcement Procedure (AEP), was reviewed by the FRC's Executive Counsel, who ultimately decided not to pursue enforcement action against EY. Consequently, the case has been closed, and the respondents are no longer liable for enforcement action.

This closure signifies that no penalties or sanctions will be imposed on Ernst & Young LLP in relation to this specific investigation. Regulated entities, particularly audit firms and public interest entities, should note that while this investigation did not result in enforcement, the FRC continues to oversee audit quality. No immediate actions are required by regulated entities based on this announcement, as it pertains to the conclusion of a specific case without adverse findings.

Source document (simplified)

Closure of investigation regarding an audit by Ernst & Young LLP

News types: Investigations

Published: 24 February 2026

This Press Notice concerns an investigation into one or more Statutory Auditor(s) and/or Statutory Audit Firm(s) [1] . The investigation did not relate to any persons or entities other than the relevant Statutory Auditor(s) and/or Statutory Audit Firm(s) and it would not be fair to treat any part of this announcement as constituting or evidencing an investigation into any other persons or entities.

The Financial Reporting Council today announces the closure of its investigation into the audits conducted by Ernst & Young LLP of the consolidated financial statements of a Public Interest Entity (PIE) and a related non-PIE entity for the years ended 31 December 2021 and 2022.

The investigation was opened under the Audit Enforcement Procedure (AEP), following a decision by the FRC’s Conduct Committee on 21 November 2024, and was announced on 13 March 2025.

Having reviewed the evidence obtained in the investigation, and having considered all relevant factors, the FRC’s Executive Counsel decided not to bring Enforcement Action.

Therefore, in accordance with Rule 146 of the AEP, the Executive Counsel has decided that the Respondents to the investigation should no longer be liable for Enforcement Action. Accordingly, the case has been closed.