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26 May 2020 | 10:08

FRC probes KPMG and PwC's Eddie Stobart audits

(Sharecast News) - The UK's accounting regulator is investigating KPMG and PwC's audits of Eddie Stobart Logistics, the company that was hit by an accounting fiasco in 2019. In August the haulage company reported an accounting error that overstated 2018 profit by £2m. The Aim-listed company faced administration before striking a £55m rescue package with shareholder Douglas Bay Capital Fund in December.

The Financial Reporting Council said it had launched investigations into KPMG's audit of the company for the year to the end of November 2017 and PwC for the year to the end of November 2018.

"The investigations will be conducted by the FRC's enforcement division under the audit enforcement procedure," the regulator said. The FRC has been getting tougher on

Eddie Stobart shares rose 2.6% to 8.31p at 10:24 BST. The shares have fallen by almost 90% since the accounting error was revealed.

On 21 May the company, known for its fleet of green and red lorries, said it would buy the trademarks "Eddie Stobart' and 'Stobart' from Stobart Group, the aviation and energy group. Stobart will change its name.

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