Audit watchdog closes investigation into Tesco accounting scandal
The Financial Reporting Council (FRC) has announced the closure of its remaining investigation into accountants at Tesco, ending a six-year probe linked to an overstatement of profit by the supermarket chain.
The FRC said this morning it was closing an investigation into Tesco’s announcement in 2014 that it had overstated profits by £263m, a figure that was later increased to £326m following an independent audit.
The audit watchdog had already closed its investigation into Tesco’s former chief financial officer in 2016, and into the supermarket’s former auditors, PwC, the following year.
The FRC and Serious Fraud Office (SFO) reached deals with the supermarket in 2017 that led to a combined £214m of fines, including a Deferred Prosecution Agreement (DPA).
The investigation into accountants working within Tesco had been paused pending the SFO’s trial of senior Tesco employees on charges relating to the overstatement.
A re-trial of two former executives collapsed dramatically in 2018 in a major blow to the embattled SFO, after judges found the pair had no case to answer.
The FRC announced this morning that following the conclusion of SFO proceedings and consideration of material from the fraud agency, it has decided to end its investigation into the Tesco accountants.
A Tesco spokesperson said: “There has been no FRC investigation of Tesco as a company, and we have never commented on the position of any individual in relation to these issues.”
“Since 2014, we have fundamentally transformed our business. Our turnaround journey is now complete, and we have fully satisfied the terms of the DPA we entered into with the SFO in 2017.”
Shares in the supermarket giant slipped as much as 0.31 per cent in morning trading.