Tesco accounts come under Financial Reporting Council scrutiny in new irregularity investigation

The Financial Reporting Council (FRC) has announced that it will be investigating Tesco accounts dating back to 2012 to study the culture which enabled profits to be greatly exaggerated.

The move comes during a highly turbulent year for the retailer which has seen it over-state its profits by as much as £263m in a bid to cover-up a substantial earnings black-hole.

In a statement published on Monday the FRC said: “The Financial Reporting Council (FRC) has launched an investigation under the Accountancy Scheme into 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 their conduct in relation to the matters reported in the company’s interim results for the 26 weeks ended 23 August 2014.”

The watchdog sets the UK standards for accounting, auditing and actuarial work and can launch disciplinary actions and sanctions against culpable firms.

To account for the financial void the retailer is looking to sell Tesco Bank – for as much as £1bn – and Blinkbox, its content-streaming platform.

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