The UK accounting regulator has hit EY with a ￡295,000 penalty after the accounting firm breached a fee cap in relation to its client Evraz, the Russian steel company in which oligarch Roman Abramovich was at the time the largest shareholder.

The Financial Reporting Council imposed a fine of just over ￡250,000 and costs of ￡45,000 on the Big Four firm after EY failed to adhere to the watchdog’s ethical standard rules for its 2021 audit of Evraz. EY also received non-financial sanctions, including a reprimand.

The FRC’s fee cap is intended to minimise conflicts between audit and other services such as consulting by restricting the amount of non-audit services that firms can provide to so-called public interest entities (PIEs). The cap on non-audit work is 70 per cent of the average of the fees paid to the audit firm over the previous three consecutive years.