New Tesco probe by Financial Reporting Council
The Financial Reporting Council (FRC) announced on Monday it had started an investigation into the approval and audit of Tesco plc’s financial statements for the years ended Feb 2012, Feb 2013, and Feb 2014.
The UK’s and Ireland’s independent regulator in charge of promoting high quality corporate governance added that its probe will also examine Tesco’s conduct in relation to matters reported in the firm’s interim results for the 26 weeks ended August 23rd, 2014.
The FRC is an independent disciplinary authority for UK and Irish actuaries and accountants.
At the beginning of October 2014, the Financial Conduct Authority, Britain’s financial watchdog, said it had launched an investigation into Tesco’s accounting system after it had inflated its profit guidance by ₤250 million.
The company had been posting income it had not yet earned too early while posting incurred costs too late, thus making its books look better than they were.
News regarding its inflated profit guidance emerged when a whistleblower told the UK’s largest supermarket chain’s legal department, which subsequently informed the London Stock Exchange.
In an official statement, the Financial Reporting Council wrote today:
“The Financial Reporting Council (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 for the financial years ended 25 February 2012, 23 February 2013 and 22 February 2014 and their conduct in relation to the matters reported in the company’s interim results for the 26 weeks ended 23 August 2014.”