UK audit regulator launches three investigations into Prax Group's collapse
The Financial Reporting Council has opened three separate probes into the auditing of the failed Prax Group, covering its parent State Oil, KPMG’s audits for 2022-2023 and PKF Littlejohn’s audit for 2024.
On 21 July 2026, the Financial Reporting Council’s conduct committee decided to launch three parallel investigations into the auditing practices surrounding the collapsed Prax Group. The first investigation will examine the financial oversight of Prax’s parent company, State Oil. The second and third will focus on the Big Four firm KPMG’s audits for the fiscal years ending 28 February 2022 and 28 February 2023.
After KPMG resigned, mid-tier auditor PKF Littlejohn took over and will be examined for its audit of the fiscal year ending 29 February 2024. The FRC noted that initiating these probes does not constitute evidence of wrongdoing. Prax Group entered administration in June 2025, prompting government control of the Lindsey Oil Refinery and its eventual sale to Phillips 66 in April 2026.
Why it matters
The probes could reveal audit failures that contributed to a major energy company's collapse and affect future oversight standards.
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