The UK’s Financial Reporting Council (FRC) has launched an investigation into PricewaterhouseCooper’s (PwC) audit of WHSmith after the retailer’s accounts were found to include inflated revenue and profit figures.
In a brief statement on 9 June, the FRC said that its Conduct Committee approved the inquiry on 21 April 2026. The probe is related to WHSmith’s accounts for the financial year ended 31 August 2024, the regulator added.
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The investigation will be carried out by the Enforcement Division under the Audit Enforcement Procedure.
WHSmith, which runs around 1,300 outlets worldwide in transport hubs and hospitals, cut forecasts for its North American arm last year after reassessing how it booked supplier payments for promotions.
Some payments were recognised too early, inflating reported results and helping senior managers reach performance targets.
According to the Financial Times report, PwC signed off the accounts for the years in which the overstatements occurred. The problem was identified after a member of WHSmith’s finance team came forward.
PwC, WHSmith’s auditor since 2015, said it will fully cooperate with the FRC, stating that “the delivery of high-quality audits is fundamental for the firm and we are committed to maintaining high standards”.
An independent review by Deloitte last year found that WHSmith had overstated revenue over several years, leading to the resignation of CEO Carl Cowling.
PwC also flagged the accounting errors in WHSmith’s US business, only after the company disclosed the issue in August last year.
In December, the FRC opened a separate investigation into WHSmith over potential breaches of UK listing and transparency rules. The regulator is also investigating PwC’s audits of Digital 9 Infrastructure and Babcock.
