UK’s FRC probes EY’s audit of Shell 2024 financial statements

The Financial Reporting Council (FRC) has started a formal inquiry into whether Ernst & Young (EY) followed UK audit partner rotation requirements during its review of Shell’s consolidated financial statements for the year ending 31 December 2024.

The investigation aims to assess adherence to regulations governing the length of service of lead audit partners.

In July 2025, Shell informed the London Stock Exchange that EY had reported issues with compliance regarding audit partner rotation.

The report identified that time limits for the rotation of audit partners, as set by the FRC’s Revised Ethical Standard, had been surpassed.

Shell also announced plans to amend its annual reports for both 2023 and 2024 after EY did not meet US Securities and Exchange Commission rules on partner rotation.

However, Shell clarified its underlying financial statements would remain unchanged.

In July, EY communicated to Shell that the US audit opinions it issued for 2023 and 2024 should not be relied upon, reported Reuters.

EY reassigned responsibility to another partner and began reissuing these audit opinions.

The decision to proceed with the investigation was confirmed at an FRC Conduct Committee meeting on 21 October 2025.

The Enforcement Division will carry out its review in line with the Audit Enforcement Procedure.

EY was quoted by Reuters as saying: “As disclosed on 2 July 2025, EY UK determined that time limitations under the FRC’s Revised Ethical Standard regarding rotation of partners on one engagement had been exceeded and reported this matter to the FRC,” citing an emailed statement.

Recently, the FRC began investigating EY over the unauthorised issuance of auditor’s reports to clients.

“UK’s FRC probes EY’s audit of Shell 2024 financial statements ” was originally created and published by International Accounting Bulletin, a GlobalData owned brand.

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