The Financial Reporting Council (FRC) has commenced an investigation into the audit by EY of the financial statements of Thomas Cook Group for the year ended 30 September 2018.

The investigation will be conducted by the FRC’s Enforcement Division under the Audit Enforcement Procedure.

The FRC will keep under close review both the scope of this investigation and the question of whether to open any other investigation in relation to Thomas Cook, liaising with other relevant regulators to the fullest extent permissible.

If EY is found to have provided unsatisfactory auditing for Thomas Cook, the firm could be hit with a fine up to £10 million, with the potential for both disciplinary hearings and the banning of at-fault accountants.

PwC had previously held the account since 2008, the account moved to EY in 2017.