Due to EY non-compliance with audit partner rotation rules, Shell to update 2023 and 2024 Form 20-Fs; financial statements remain unchanged
Rhea-AI Summary
Shell plc (NYSE: SHEL) announced it will file amendments to its 2023 and 2024 Form 20-Fs due to Ernst & Young LLP's (EY) non-compliance with SEC auditor independence rules. The issue arose when EY disclosed that its lead audit partner had exceeded the allowed period under SEC audit partner rotation rules for these years.
Despite this compliance issue, Shell emphasized that no changes are required to the previously issued financial statements for 2023 and 2024. EY has assigned a new lead audit partner and will issue new US audit opinions, which remain unqualified. The company will file the amended Form 20-Fs with the SEC on July 2, 2025.
Additionally, EY informed that time limitations under the UK Financial Reporting Council's Revised Ethical Standard regarding partner rotation had also been exceeded. However, no amended filings are required in the UK, and this matter will be handled between EY and the UK Financial Reporting Council.
AI-generated analysis. Not financial advice.
Positive
- Financial statements for 2023 and 2024 remain unchanged and valid
- EY audit opinions remain unqualified
- Swift remediation with new lead audit partner assigned
- No amended filings required in the UK market
Negative
- EY's non-compliance with SEC auditor independence rules requires Form 20-F amendments
- Lead audit partner exceeded allowed period under SEC rotation rules
- EY also exceeded UK Financial Reporting Council's time limitations for partner rotation
News Market Reaction – SHEL
On the day this news was published, SHEL gained 1.53%, reflecting a mild positive market reaction.
Data tracked by StockTitan Argus on the day of publication.
Due to EY non-compliance with audit partner rotation rules, Shell to update 2023 and 2024 Form 20-Fs; financial statements remain unchanged
London, July 2, 2025 – Ernst & Young LLP ("EY") has advised Shell plc that, for the years ended December 31, 2023 and 2024, EY was not in compliance with the SEC auditor independence rules. As a result, Shell plc will today file an amendment to its filed Form 20-Fs for those years with new US audit opinions issued by EY. The financial statements for 2023 and 2024 remain unchanged. The EY audit opinions remain unqualified.
Additional notes
On July 1, 2025, EY, Shell plc’s independent registered public accounting firm, advised the Audit and Risk Committee of the Board that its US opinions on Shell plc’s previously issued audited consolidated financial statements and effectiveness of internal control over financial reporting (jointly the “previously issued financial statements”) for the years ended and as of December 31, 2023 and 2024 (the “applicable years”), respectively, should no longer be relied upon. After a review, EY concluded that it was not in compliance with the SEC’s auditor independence rules for the audits of the applicable years.
EY has determined that the partner who led the audit for the applicable years had exceeded the period allowed under SEC audit partner rotation rules and hence was not eligible to serve as lead engagement partner for those audits.
EY subsequently assigned a different partner to perform the role of lead audit partner with respect to the audits and concluded that no changes to the previously issued financial statements for the applicable years are necessary. EY has also concluded that the appropriate remediation has been completed, and it is capable of exercising objective and impartial judgment with respect to the US audit opinions included in the amended Form 20-Fs for the applicable years to be filed with the SEC.
The previously issued financial statements as prepared by Shell plc for the applicable years are unchanged. Shell plc will file amended Form 20-Fs for the applicable years later today.
Notes to editors
- SEC refers to the US Securities and Exchange Commission.
- To reflect the new issuance date of the Consolidated Financial Statements, consequential updates were included with respect to the going concern period and the Post balance sheet events note to the Consolidated Financial Statements. Save for these items, the previously issued financial statements and other notes have not changed. The EY audit opinions remain unqualified.
- EY also advised the Audit and Risk Committee of the Board that the time limitations under the UK Financial Reporting Council’s Revised Ethical Standard regarding rotation of partners had been exceeded. Follow-up is a matter between EY and the UK Financial Reporting Council. No amended filings are required in the UK.
- Ernst & Young LLP is the UK member firm of the EY network.
Enquiries
Shell Media Relations International: +44 20 7934 5550
US Media Relations: Contact Shell US Media Team
LEI number of Shell plc: 21380068P1DRHMJ8KU70
Classification: Additional regulated information required to be disclosed under the laws of the United Kingdom
