EY has been fined £1.2mn for the Big Four firm’s audit of collapsed online furniture retailer Made.com, the UK’s accounting regulator said on Tuesday. The Financial Reporting Council also issued a £49,000 financial penalty and a “severe reprimand” to an audit partner after the auditor admitted breaching standards in its 2021 work. The failures concerned the company’s going‑concern assessment and a deferred tax asset, with EY failing to perform enough checks or challenge the models used by Made.com.

Made.com boomed during the Covid‑19 pandemic, but supply‑chain bottlenecks and a drop in demand led to multiple profit warnings and its collapse into administration in 2022. Its brand and intellectual property were acquired by Next for £3.4mn in a prepack administration less than 18 months after a £775mn valuation in June 2021.

EY issued a disclaimer of opinion on the group’s interim financial statements in 2022 because of uncertainties Mixing the going‑concern assessment. The FRC stated EY will pay investigation costs. Penrose Foss, FRC executive counsel, warned that auditors had “relied on management’s forecasts without applying sufficient challenge or carrying out adequate testing”.

EY updated its internal guidance and said the delivery of high‑quality audits remains a priority, learning from the matter.