May 26, 2020 / 9:18 AM / 2 months ago

Britain's accounting watchdog investigates Eddie Stobart audits

LONDON (Reuters) - Britain’s accounting watchdog has opened investigations into audits by KPMG and PwC of haulier Eddie Stobart Logistics (ESLE.L).

The company’s shares were suspended in 2019 because of its failure to publish results on time after it found 2018 adjusted operating profit was overstated by about 2 million pounds ($2.46 million).

“The Financial Reporting Council (FRC) has commenced two investigations into the audits of Eddie Stobart Logistics plc for the years ended 30 November 2017 (KPMG) and 30 November 2018 (PwC),” the FRC said in a statement on Tuesday.

KPMG said it would cooperate fully with the watchdog to conclude the investigation as quickly as possible. PwC said it would cooperate with the FRC and also said it had introduced a major programme to enhance audit quality in June 2019.

The haulier, known for its green and red trucks, took a 169 million pounds charge in its half-year results published in February as it took its first steps to move past the accounting scandal.

KPMG and PwC are two of the world’s “Big Four” accounting firms that are facing sweeping reform of how they operate in Britain following a string of corporate failures that raised questions about auditing standards and the ability of the FRC to enforce them.

Reporting by Huw Jones; Editing by Mark Potter/Barbara Lewis/Jane Merriman

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