Core Viewpoint - EY is under increased regulatory scrutiny due to multiple investigations by the Financial Reporting Council (FRC), particularly concerning its audit of Shell's accounts and compliance with partner rotation rules [1][4]. Group 1: Investigations and Regulatory Actions - The FRC has initiated an investigation into EY's audit of Shell, marking the sixth active investigation into the firm [1]. - EY has faced scrutiny for its audits of other entities, including the Post Office, Made.com, and NMC Health [1]. - This year, EY has already incurred over £5 million in fines, including a £4.9 million penalty for serious breaches related to the audit of Thomas Cook [2]. Group 2: Partner Rotation Rules - Regulations in both the US and UK limit the duration senior partners can serve as lead auditors to prevent excessive familiarity with management [3]. - EY acknowledged that Gary Donald, the partner responsible for Shell's audit, exceeded the allowed period under these rotation rules but continued to sign off on Shell's accounts for 2023 and 2024 [3][4]. - Following the discovery of this breach, Shell had to republish its annual report in the US, signed by a different EY partner [4]. Group 3: Additional Investigations - The FRC has launched a separate investigation into two EY auditors for issuing unauthorized audit reports to unnamed companies [6]. - EY was fined £325,000 in April for signing off on accounts for Stirling Water Seafield Finance beyond the required 10-year period [6]. - Banks and publicly listed companies are classified as "public interest entities," necessitating stricter audit oversight [6]. Group 4: Company Responses - An EY spokesperson stated that the firm recognized the breach of time limitations regarding partner rotation and reported it to the FRC, emphasizing their commitment to compliance [7]. - Shell confirmed that it disclosed the EY non-compliance issue in July 2025 and re-filed its financial statements, which remain unchanged [8].