UK watchdog starts probe into EY Shell audit

(Sharecast News) - Britain's accounting watchdog on Monday said it had started a probe into Ernst & Young's audit of Shell's 2024 accounts over potential breaches of audit partner rotation rules.

The oil and gas giant admitted in July that it had broken UK rules on audit partner rotation set by the Financial Reporting Council, which require listed companies to change the lead audit partner every five to seven years and impose cooling-off periods before they can return.

Shell added that it would amend its 2023 and 2024 annual reports after EY failed to comply with US Securities and Exchange Commission rules on partner rotation, though its financial statements would remain unchanged.

US rules require lead and reviewing audit partners to rotate after five years with a five-year cooling-off period, while other key partners have to rotate after seven years with a two-year break.

"As disclosed on 2 July 2025, EY UK determined that time limitations under the FRC's Revised Ethical Standard regarding rotation of partners on one engagement had been exceeded and reported this matter to the FRC," EY said in a statement.

Reporting by Frank Prenesti for Sharecast.com