An auditor involved in Tesco plc’s (LON:TSCO) 2014 accounting scandal is likely to be cleared of misconduct claims after the Financial Reporting Council (FRC) said it was “not a realistic prospect” that it would be found guilty.
The FRC said it has ended its two-and-a-half-year investigation into business services giant PwC's auditing and preparation of Tesco's accounts for 2012, 2013 and 2014. Tesco replaced PwC as its auditor with Deloitte in 2015.
“The executive counsel to the FRC has concluded that there is not a realistic prospect that a tribunal would make an adverse finding against PwC and certain members in respect of the matters within the scope of the investigation,”the FRC said in a statement today.
The independent disciplinary body for UK accountants and actuaries said it would continue to investigate other chartered accountants who were auditors of Tesco.
Tesco was in March fined £129mln by the Serious Fraud Office over its accounting scandal, in which profits were overstated by £326mln after incorrectly booking payments from its suppliers.
The supermarket also agreed to spend £85mln on compensating investors affected by the incident.
Tesco’s full year profit before tax fell to £145mln in the year to 25 February 2017 from £202mln in 2016, largely as a result of the fine and compensation payment.