The UK Financial Reporting Council (FRC) has launched an investigation into EY's audit work for the Post Office, citing concerns over how the Big Four firm addressed red flags tied to the Horizon IT system at the heart of a high-profile scandal.
The FRC will scrutinize whether EY's audits from 2015 to 2018 met professional standards, with particular attention to the integrity of financial reporting amid known issues with the Horizon accounting software. That system provided faulty information, ultimately leading hundreds of postmasters to be wrongfully convicted of fraud and theft between 1999 and 2015. Testimony from the ongoing public inquiry into the Horizon scandal suggests EY was aware of the system's flaws as early as 2011.
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