Unveiling the Horizon Scandal: EY Under Scrutiny in Post Office Audits

In a developing situation, EY, the accounting heavyweight, is now under investigation for its audits related to the infamous Post Office Horizon scandal, which spanned from March 2015 to March 2018. The Financial Reporting Council (FRC), the UK’s regulatory body for accounting standards, is probing whether EY adhered to essential auditing benchmarks, particularly concerning the contentious Horizon IT system. This software, designed by Fujitsu, played a pivotal role in a scandal that resulted in the wrongful convictions of hundreds of postmasters, marking it as a significant miscarriage of justice in UK history.

EY has publicly committed to take this inquiry seriously, expressing their intent to fully cooperate with the FRC. Meanwhile, the Post Office has refrained from commenting on the ongoing investigation. The timing coincides with the recognition of sub-postmaster campaigners—Lee Castleton, Seema Misra, and Chris Head—who will be honored with OBEs at Windsor Castle, signaling a broader acknowledgment of the struggles faced by those affected.

Central to the investigation is the shocking fact that over 900 sub-postmasters were wrongfully prosecuted due to erroneous data from the Horizon system, with the Post Office taking legal action against 700 individuals from 1999 to 2015. A significant gap in the inquiry remains regarding the fate of funds wrongfully extracted from the victims. The FRC’s focus is primarily on the statutory auditors’ compliance with auditing standards during the specified timeframe, yet intriguingly, recent public hearings did not address EY’s audits of the Post Office, indicating a potential oversight.

Internal communications revealed that EY had cautioned the Post Office’s chair, Alice Perkins, about significant risks tied to the Horizon software back in 2011. Concerns were raised about the software’s ability to capture data accurately. Despite those warnings, Perkins did not elevate these issues within the organization when Horizon’s reliability was questioned in subsequent years. This investigation places a spotlight on the accountability of auditors and raises pressing questions about the integral systems responsible for monumental injustices in the realm of corporate accountability.