Supermarkets

FRC closes five-year investigation into Tesco

The Financial Reporting Council (FRC) has announced the closure of a five-year investigation into the accountants working within ‘Big Four’ grocer Tesco.

The investigation itself related to the £250m overstatement of profits it reported in 2014, and the UK watchdog said the matter has now been closed “without service of a Formal Complaint”.

The FRC said during the course of the wider investigation, a number of accountant employees within Tesco were added as subjects.

The investigation into these individuals was subsequently paused pending the Serious Fraud Office’s (SFO) trial of three (non-accountant) senior Tesco employees on charges relating to the overstatement.

Following the conclusion of the SFO proceedings, and consideration of relevant material and information subsequently obtained from the SFO, its executive counsel decided to discontinue the matters in relation to each of the remaining subjects.

The FRC said: “The conduct of 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 the preparation, approval and review of financial information relating to the 26 weeks ended 23 August 2014 leading to the publication of the company’s interim results on 23 October 2014.”

The regulator previously closed the investigation into Tesco’s former chief financial officer in August 2016 and its former auditors in June 2017.                                       

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