Thomas Cook’s financial auditors have been grilled by MPs over their role in signing off the failed company’s accounts.
Witnesses from PwC and EY were questioned at a hearing of Parliament’s Business, Energy and Industrial Strategy select committee on 22 October.
During the inquiry, both firms have defended their financial scrutiny of Cook and challenges to the board in the years leading up to the company’s collapse on 23 September.
This includes an EY decision to leave £2.5 billion in goodwill from a 2007 MyTravel merger in its 2018 accounts, only to write off £1.1 billion of that the following May, and PwC’s dual role in advising Cook on non-audit matters.
PwC audited Thomas Cook between 2007 and 2016 and EY from that point until the collapse.
Hemione Hudson, head of audit at PwC, said the company “stands by its opinion in each of the years we signed, up to and including 2016”.
“During the process of each of the audits there was considerable debate and challenge of the board and a number of issues were raised, significant risks drawn to the attention of the audit committee and the board in every one of those years,” Hudson added.
When asked if EY should have been tougher on Thomas Cook, audit partner Richard Wilson said: “With hindsight, with information that I didn’t have at the time that I signed off the November accounts, then the answer has to be yes, with hindsight.”
The inquiry continues.