The British regulatory authority Financial Reporting Council, FRC, which oversees both companies' accounting and auditing, will investigate the audit work of bankrupt travel giant Thomas Cook, Sky News reports.

The FRC will look at how accounting firm EY audited the accounts for 2018. EY came in as the new auditor for Thomas Cook in 2017, replacing PwC.

In the UK, where the collapse of Thomas Cook led to the loss of 9,000 jobs, MPs have called for an investigation into the company, mainly out of dissatisfaction with the high compensation paid to former CEOs as the company continued to struggle.

Thomas Cook is also said to have often booked regular costs under one-off items, which EY urged them to stop doing. By placing costs in this item, the result can be made to look higher than it actually is.

If the FRC finds any wrongdoing, it could lead to hefty fines for those responsible, according to Sky News.

Source: finwire