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Tesco situation being watched closely

Britain’s accounting and audit watchdog has said that it is keeping an eye on events after the incident that saw Tesco overstate its profits by £250 million.

The discrepancy caused a significant fall in the price of shares, as well as the suspension of four senior execs.

The Financial Reporting Council (FRC), which has the right via the Financial Reporting Review Panel to discipline the supermarket chain with regards to accountancy misconduct, can ask a company for a resubmission of financial statements. It said:

“The FRC does not have powers to monitor or require restatement of unaudited trading statements. It will consider the outcome of the investigation announced by the company and determine whether it should take regulatory action.”

The news came after it was revealed that Alan Stewart, finance chief, came in months earlier than expected from M&S, as well as serious concerns expressed regarding the firm’s corporate management credibility.

Reports also indicated that its previous group financial director, Laurie McIlwee, has not been seen in its Hertfordshire HQ since he resigned the post, despite the fact that he technically still holds a position as a consultant.

Shares in Tesco are now close to half the value that they were 12 months ago.

The watchdog will continue to monitor Tesco, and HMRC will have certainly sat up and taken notice. The latter is continually implementing new plans to ensure that the books of all UK businesses are accurate and up to date. Business owners would be wise to use an accountant in the Wirral and elsewhere to ensure that the numbers are in line with the latest rules and policies.

Posted by Louise
October 2, 2014
Finance

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