Thomas Cook’s auditors in firing line as repatriation continues

The Financial Reporting Council has announced an investigation. It will be one of many as the reverberations from the tour company’s demise continue, writes James Moore

Thousands of jobs were lost when the firm ceased trading (AFP/Getty)

With the horror stories of Thomas Cook’s holidaymakers all over the media amid a massive repatriation programme that has seen the tour operator’s staff turning up for free to assist, attention is now turning to who is to blame. The anger over this company’s spectacular collapse is raw, and entirely justifiable.

While bosses, chief executive Peter Fankhauser in particular, are at the front of the queue when it comes to apportioning blame, there’s plenty around to be shared. Considering the UK’s competition regulator recommended a major shake-up of accountancy earlier this year – and the scrutiny faced by the Big Four firms and their auditors – an investigation into EY’s performance with respect to Thomas Cook was inevitable. The Financial Reporting Council (FRC) has duly announced one.

In this year’s interim results, the firm warned there was “significant doubt” about whether the holiday outfit could continue as a going concern. But the investigation isn’t going to look at Thomas Cook’s final months. Rather it will focus on the work done for the year ending 30 September 2018. The annual report covering that period contains notes about challenges being raised by Thomas Cook’s auditors and adjustments being required to its reporting as a result of them.