EY faces investigation over Post Office Horizon audit

Accounting giant EY is being investigated over its audits of the Post Office in relation to the Horizon scandal from March 2015 to March 2018.

The Financial Reporting Council (FRC), the UK's accounting regulator, said it will check whether EY met its standards "with particular reference to matters related to the Horizon IT system".

The software developed by Fujitsu was at the heart of the Post Office scandal that saw hundreds of postmasters wrongly convicted.

EY said it takes its responsibilities "extremely seriously" and will be "fully cooperating" with the FRC.

The Post Office declined to comment.

The news of the investigation comes as sub-postmaster campaigners Lee Castleton, Seema Misra, and Chris Head will be made OBEs at Windsor Castle on Wednesday.

More than 900 sub-postmasters were prosecuted for stealing because of incorrect information from the Horizon computer system. It has been called the UK's most widespread miscarriage of justice.

The Post Office itself took many cases to court, prosecuting 700 people between 1999 and 2015.

One of the unanswered questions of the Post Office inquiry is where all the money wrongly taken from victims of the Horizon scandal actually went.

The FRC wants to focus specifically on the role of statutory auditors - people legally required to review the financial statements of a company - in meeting the auditing standards of that time.

However, the FRC said on Wednesday the recent public hearings carried out as a broader inquiry into the Horizon scandal did not cover EY's audits of the Post Office, so will not be covered by its investigation.

In June 2024, the inquiry was told the Post Office's auditors EY warned Alice Perkins, the Post Office's chair in 2011, that the Horizon software was "a real risk".

EY was also noted as asking "does it capture data accurately?".

Notes from the meeting with EY mention a sub-postmaster said there was "a systems problem" with Horizon.

The inquiry heard that Ms Perkins did not raise concerns internally about this nor did she mention the EY meeting when questions about Horizon came up in years that followed.