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Deloitte’s investigation finds previous Tesco reporting issues

Corporate finance giant Deloitte has finished reviewing Tesco’s exaggerated six-month results, revealing that the damage is in fact larger than the original declaration of £250 million and goes further back than previously believed.

Deloitte’s investigation has confirmed that Tesco’s total adjustments of commercial income in the present reporting period stand at £263 million, and that any amounts deferred or pulled forward not only violated Tesco’s own accounting policies, but were repeated time and again in previous reporting periods.

PricewaterhouseCoopers (PwC) has been auditing Tesco for 31 years and stuck to its client confidentiality policy, refusing to comment. The Financial Conduct Authority (FCA) is also looking into the issue.

While Deloitte’s probe has come to an end, it is just the beginning for other accounting bodies, now that the investigation from the FCA is underway and with a possible involvement from the Financial Reporting Council.

Additional investigations will look at how income adjustments occurred over time.

A PwC spokesman commented:

“The FRC is giving careful consideration to Tesco’s announcement this morning and will continue to monitor the events at Tesco closely to determine whether it should take regulatory action.”

Tesco has responded by saying that it:

“[…] will continue to cooperate fully with the FCA and any other regulatory authorities.”

Such accounting bodies as the FCA and FRC may have bigger fish to fry, but HMRC still has a sharp focus on SMEs and is not shy when it comes to pulling businesses up on errors in their accounts. By contacting an accountant in the Wirral, businesses would be showing the kind of vigilance needed to prevent any such discrepancies.

Posted by Mark
November 6, 2014
Finance

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