Tesco: faces FRC accounting audit

Britain’s accounting watchdog on Monday launched a probe into Tesco’s accounts after the troubled supermarket giant admitted overstating its profits earlier this year.

The Financial Reporting Council (FRC) said in a brief statement that it will investigate the financial figures for the last three years reported by Britain’s biggest retailer and audited and prepared by PricewaterhouseCoopers (PwC).

“The FRC has launched an investigation under the Accountancy Scheme into members and a member firm in relation to the preparation, approval and audit of the financial statements of Tesco PLC,” it said.

The watchdog added that the statements were for the retailer’s financial years ending February 2012, February 2013 and February 2014.

It will also probe “conduct in relation to the matters reported in the company’s interim results for the 26 weeks ended 23 August 2014”.

Tesco’s auditor PwC added in a separate statement: “We take our responsibilities very seriously and remain committed to delivering work to the highest professional standards. We will cooperate fully with the FRC in its enquiries.”

A Tesco spokesman said the group noted the probe, adding: “We will provide support to the FRC’s investigation.”

The Serious Fraud Office had launched a criminal investigation into Tesco in October after the retailer revealed it had overstated its profits by £263 million as a result of accounting errors stretching back to before 2013.

The scandal meanwhile sparked the suspension of a number of Tesco executives, and the departure of chairman Richard Broadbent.

The British supermarket’s share price fell 0.71 percent to 184.08 in early Monday afternoon deals on London’s FTSE 100 index of leading companies, which was 0.87 percent higher at 6,602.68 points.

Tesco is the world’s third-biggest supermarket group after France’s Carrefour and global leader and US giant Wal-Mart.