UK regulator fines EY and a partner £1.2 million for audit failures related to furniture retailer Made.com. According to the regulator, the audit did not meet required standards because EY relied too heavily on Made.com’s own financial forecasts and did not perform sufficient testing or challenge those estimates to an appropriate extent. The watchdog states that this approach led to inadequate audit procedures in connection with the company’s accounting, particularly where forecasts and related judgments were involved. The regulator’s decision covers both the firm and the individual partner, reflecting findings that the work did not provide an adequate basis for the audit opinion.
The Financial Times and The Independent report the fine amount and the regulator’s main criticism in consistent terms: EY’s reliance on management forecasts was excessive and the audit lacked sufficient testing and challenge. The Belfast Telegraph provides the same headline information, aligning with the reported fine and the audit failure theme. The sources do not indicate that the regulator disputes Made.com’s underlying business results; rather, the action focuses on the standard of auditing and verification performed by EY during the relevant period.
