The Financial Reporting Council (FRC) handed out a £1.197m sanction after the company breached audit rules while dealing with Made.com, saying it relied too heavily on the retail group’s own forecasts and did not sufficiently challenge them. 

Julie Carlyle, an audit engagement partner at the firm who oversaw the audit, was fined around £49,000.

Made fell into administration in November 2022 and the brand was snapped up by Next which continues to run the business.

The FRC said the failures related to EY’s audit of Made’s finances for the year to December 2021, before its collapse.

It highlighted there was a “failure to perform adequate procedures” to assess the accuracy and reliability of management forecasts related to whether the firm could operate as a going concern.

Penrose Foss, executive counsel at the FRC, said: “In this case the auditors relied on management’s forecasts without applying sufficient challenge or carrying out adequate testing to obtain sufficient evidence.”

A spokesman for EY, which has offices in Edinburgh, Glasgow and Aberdeen, said: “The delivery of high-quality audits remains our priority. While there was no suggestion by the FRC that the full-year financial statements had been misstated, we committed to learning from this matter and, in the years since this audit, have updated our internal guidance as part of our focus on continuous improvement.”