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UK FRC Probes EY Audits of Post Office

UK FRC Probes EY Audits of Post Office

by Starling Insights

Starling Insights Editorial Board

Apr 25, 2025

Observations

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.

The Post Office probe raises deeper questions about the profession's capacity and willingness to challenge management narratives and uphold the public interest — particularly when reputational or commercial pressures are at play. In 2023, Starling Insights published "Renal Failure: A Crisis in Audit Culture?," a Deeper Dive report discussing scandals faced by auditors globally and how such trends impact society at large.a

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