Tesco dumps auditor PwC after £263m accounting fiasco and hires DeloitteComments Off on Tesco dumps auditor PwC after £263m accounting fiasco and hires Deloitte
A tendering process for a new independent auditor was brought forward by a year as chief executive Dave Lewis and new chairman John Allan attempt to put behind them the final parts of the discredited ex-boss Phil Clarke’s regime.
PwC agreed not to put itself forward for consideration. It emerged last year that Tesco directors were furious after sources at PwC attempted to distance themselves from the scandal.
The sources were quoted as saying directors at the grocer “hid” the misreporting from auditors, which explained why the questionable practices had been signed off for at least three years.
Deloitte will take up the role following the retailer’s annual general meeting later this year provided shareholders approve the appointment.
In September, Lewis ordered an internal report into the accounting overstatements, which discovered that profits from supplier payments were being banked in the wrong periods, in some cases before the payments had been received.
The report by Freshfields and Deloitte was passed to the Serious Fraud Office, which is investigating along with the Financial Reporting Council and the Groceries Code Adjudicator.
Companies are encouraged to change auditors regularly, and even before the accounting scandal there had been calls for PwC to be replaced due to the length of time it had worked with Tesco. PwC declined to comment.
Lawyers are also preparing to file a case against Tesco for misrepresentation to the stock market, attempting to claim that the value of shares was hit due to the problem.