Accounting watchdog probes Eddie Stobart audits

The Financial Reporting Council on Tuesday said it has launched investigations into KPMG and PwC over the audits of Eddie Stobart Logistics.

The accounting watchdog said the two investigations are into the audits of Eddie Stobart Logistics plc for the years ended 30 November 2017 (KPMG) and 30 November 2018 (PwC).

This will be conducted by the FRC’s enforcement division.

A spokesman for KPMG said: “We will cooperate fully with the FRC to conclude this matter as quickly as possible.”

A PwC spokesman said: “We will cooperate fully with the FRC in this investigation. We are committed to delivering consistently high quality audits and in June 2019 we introduced a major ongoing programme to enhance audit quality across the firm.”

Eddie Stobart Logistics had a tumultuous time last year. In July 2019 it flagged an accounting error for the year to November 2018, and shares were suspended in August 2019 when it couldn’t file half year accounts in time because of the accounting issues.

There was also a takeover tassle for the business. Eventually late last year shareholders backed a £55 million cash injection by Dbay Advisors, a major shareholder, in exchange for control of the Eddie Stobart businesses.