The probe stems from the ongoing fallout of the Horizon IT scandal, which saw hundreds of sub-postmasters wrongfully convicted based on faulty software data.

The FRC’s investigation will specifically examine whether EY’s audit work met the required standards, with a particular focus on matters related to the Horizon IT system. EY served as the Post Office’s auditor from the late 1980s until 2019.

Renewed public outrage over the scandal, fuelled by a 2024 ITV dramatisation, has increased scrutiny. The FRC noted it had “reclaimed” the investigation from the usual oversight body, the ICAEW, “given the heightened public interest considerations”.

This investigation follows the conclusion of public hearings for a separate statutory inquiry into the Horizon scandal, during which testimony from Alice Perkins, the former Post Office char, suggested EY may have been aware of issues with the system as early as 2011.

It also marks the third time in a week that EY’s historical audit performance has been challenged, following recent fines related to its work for Thomas Cook and Stirling Water Seafield Finance.

A statement from EY acknowledged the FRC investigation and stated: “We take our public interest responsibilities extremely seriously and will be fully co-operating with the FRC during their investigation.”