Four EY partners exit after mistake with Shell
Four EY partners involved in an embarrassing mistake last summer that led to the Big Four firm losing one of its most lucrative and important clients have left the business.
Companies House filings published this week show that the partners departed in early December, just before Britain’s accounting industry regulator announced it was investigating a breach of “partner rotation” rules.
In July, EY admitted not realising that one of its senior partners had been leading its audits of Shell, the oil and gas group, for too long. The Financial Reporting Council has rules that limit how long senior partners can work with a particular client to prevent them from becoming too close to management.
The oversight, one of a few EY has made in recent years, has had serious consequences for the firm. If the FRC finds it guilty of breaching its rules, EY faces a seven-figure fine but, more importantly, the debacle resulted in the firm losing the Shell audit contract last week. From next year, PwC will take over the $66 million-a-year contract.
EY was forced to write to Shell last summer to say that Gary Donald, the partner who led the team signing off Shell’s accounts, had “exceeded the period allowed under partner rotation rules”.
Under those rules, Donald should not have signed off the 2023 and 2024 accounts. As a result of “EY’s non-compliance”, Shell had to republish its annual reports in the United States for those years, and EY assigned a different partner to oversee them. The new lead partner did not make any changes to the financial statements or the audit opinion. At the time, EY said it deeply regretted the episode and reported itself to the FRC, which is still investigating.
Donald is one of the partners who left EY just before Christmas, along with three others: Mark Woodward, Hee Yu Lee and Alistair Denton. The Financial Times reported that the four were involved in the Shell audits and that their exits followed an internal review.
• Veteran EY partner takes parting shot at ‘autocratic’ consultancy
It is not clear if any of them were found to have fallen foul of any rules or company policies. A spokeswoman for EY declined to comment. An attempt was made to contact the partners through EY.
EY is Britain’s fourth-largest audit firm, and was paid £837 million last year to sign off companies’ accounts. Its internal processes have come under scrutiny of late amid a string of mistakes. In addition to the Shell error, last spring it was found to have not realised that it had stayed on as the auditor of one of Veolia’s UK subsidiaries for too long.
In December, the FRC opened another investigation into EY because some clients were issued with auditor’s reports that had not been signed off by a senior partner.
EY is the subject of six active FRC investigations, more than any of its peers. In 2025, the firm paid out more than £5 million in fines related to its work for the failed travel group Thomas Cook and Stirling Water Seafield Finance, one of Veolia’s UK subsidiaries.