- EY raises provisions to £188m, a record for the firm.
- Move linked to legal claims including NMC Health case.
- Firm faces multiple regulatory investigations and audit concerns.
EY has set aside a record £188m to cover regulatory fines and legal claims in the UK, highlighting the pressure building around the firm’s audit work and internal processes.
The provision marks a sharp jump from £44m previously ringfenced and is said to be the largest in EY’s history. It is also significantly higher than what the firm has typically set aside over the past two decades, suggesting a shift in how it is preparing for potential liabilities.
The figure, disclosed in accounts filed for the financial year ending June 2025, is understood to exceed previous provisions by any of the Big Four firms, overtaking the £179m set aside by KPMG in 2022.
The shadow of big cases
A large part of the provision is believed to be linked to a long-running dispute involving NMC Health, the former FTSE 100 group that collapsed. Administrators had filed a claim against EY seeking £2.4bn over alleged failings in its audit work between 2012 and 2018.
An out-of-court settlement has since been reached, although the final amount has not been disclosed. EY has denied the allegations and described the claim as “highly speculative”, as quoted in a news report, stating that a full payout of £2.4bn was not considered a realistic outcome.
As is common in such cases, any eventual payments are likely to be spread over several years and partially covered by insurance, making the full financial impact difficult to gauge from a single year’s accounts.
Mounting scrutiny and internal lapses
The increased provision comes at a time when EY is facing broader scrutiny over its audit practices. The firm is currently under multiple investigations by the Financial Reporting Council, with reports suggesting it is involved in five ongoing cases — more than any other major accounting firm.
Recent issues have included basic compliance lapses. EY lost a major audit contract with Shell after breaching rules on how long a partner can remain on an account. It was also found to have exceeded time limits while auditing a UK subsidiary of Veolia.
In another case, the regulator opened an investigation after some audit reports were issued without being signed off by a senior partner.
Despite these setbacks, EY remains one of the UK’s largest audit firms, earning £837m last year from audit work alone. But the rising provisions and regulatory attention suggest the firm is entering a period where risk management and oversight are likely to come under closer focus.
