The Financial Reporting Council (FRC) announced on 8 June 2020 the closure of its investigation into accountants working within Tesco relating to Tesco PLC’s (Tesco) overstatement of profit of approximately £250m as announced to the market in September 2014.
The investigation commenced in December 2014 with the following scope:
“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 FRC previously closed the investigation into Tesco’s former Chief Financial Officer in August 2016 https://www.frc.org.uk/news/august-2016/closure-of-investigation-into-the-conduct-of-mr-la and its former auditors in June 2017 https://www.frc.org.uk/news/june-2017/closure-of-investigation-into-the-conduct-of-membe.
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, Executive Counsel has decided to discontinue the matters in relation to each of the remaining subjects. Accordingly, the matter has been closed without service of a Formal Complaint.