Shell is to file amended regulatory filings after Big Four firm EY told the oil giant it broke audit rules after its lead partner overstayed their time.
Shareholders were informed on Wednesday that an unnamed partner at EY who led the 2023 and 2024 audits for the energy giant “had exceeded the period allowed under Securities and Exchange Commission (SEC) audit partner rotation rules”.
EY informed Shell on Tuesday that its US opinions on Shell’s previously issued audited consolidated financial statements and effectiveness of internal control over financial reporting “should no longer be relied upon”.
The firm assigned a different partner to perform the role of lead audit partner, who concluded that no changes to the previously issued financial statements for the applicable years are necessary.
EY also concluded that “the appropriate remediation” was for Shell to file an amended Form 20-F for the two years where it had breached rules to the SEC.
EY also advised the energy giant that the time limitations under the UK Financial Reporting Council (FRC)’s rules on rotation of partners had also been exceeded.
However, the group noted that no amended filings are required in the UK.
Commenting on the matter, a spokesperson from EY UK said it “deeply regrets this occurred and has remediated the matter.”
“There has been no change to the financial information previously prepared by Shell plc, for the applicable years, and EY UK is providing updated, unqualified, SEC audit opinions.”
“We are committed to the highest standards of audit quality and will continue to take any necessary steps to ensure these standards are upheld,” the spokesperson added.
Just last month KPMG UK and an audit partner were hit with sanctions over the audit of Carr’s after the partner was found to be placing reliance on the work of the other audit firm.
Last week the oil giant denied reports that it is engaged in talks to acquire its rival BP.
By City AM
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