The UK Financial Conduct Authority (FCA) has started an investigation of Tesco’s accounting practices after the supermarket retailer overstated expected profit for H1 by GBP 250m. Tesco suspended four senior executives, including the head of Tesco’s food business, after the blunder was discovered and called for an outside audit by Deloitte and the law firm Freshfields. “Tesco will continue to cooperate fully with the FCA and other relevant authorities considering this matter,” the company said in a statement. The news comes three weeks after Tesco forecasted H1 profits would by GBP 1.1bn. The FRC said it intends to review the findings of Tesco’s independent audit and decide whether to pursue regulatory action. The retailer’s shares have fallen by 40 percent this year.
