Accounting watchdog launches Tesco probe

The Financial Reporting Council has launched an investigation into Tesco that may see the company sanctioned and force the restatement of its last three financial reports.

The ailing grocery giant rejigged its accounts several times in the past few months after discovering major accounting irregularities to the tune of hundreds of millions of pounds.

Tesco is under the Serious Fraud Office’s microscope, with seven executives suspended while the process is completed.

In September the accounting watchdog said it was monitoring the debacle and mulling whether it should also get involved.

The organisation has the power to punish errant members and force companies to restate financial reports. It does not have jurisdiction over unaudited trading statements, however, which was how Tesco originally set out its errors.

The FRC will investigate the preparation, approval and auditing of the financial statements for the years ended February 2014, 2013, and 2012. It is also taking a harder look at the company’s conduct in reporting the interim results for six months to August.

Following the investigation, the organisation may refer the company and/or member accountants to a disciplinary tribunal.

Tesco chairman Sir Richard Broadbent has resigned over the fiasco.