Watchdog drops probe into PwC's role as Tesco auditor

The Financial Reporting Council (FRC) has dropped its investigation into PwC's role as Tesco's auditor during the supermarket's accounting scandal.

The Financial Reporting Council said there was no 'realistic prospect' of a tribunal finding against PwC. Picture: Philip Toscano/PA Wire

Britain’s accountancy watchdog said that the probe into the PwC and certain members of the Institute of Chartered Accountants in England and Wales has been closed as “there is not a realistic prospect” that a tribunal would make an adverse finding against either.

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However, the FRC added that the investigation into certain other members of accountancy bodies is ongoing.

Tesco dropped PwC as its auditor in 2015. Picture: Phil Wilkinson

The watchdog said: “The Financial Reporting Council announces the closure of its investigation into the conduct of PricewaterhouseCoopers (PwC) and certain members of the Institute of Chartered Accountants in England and Wales in their capacity as auditors of Tesco.

“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.”

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PwC was the supermarket’s auditor when it was discovered that Tesco had inflated profits by £263 million in 2014, action that the Financial Conduct Authority deemed as market abuse earlier this year.

Tesco dropped PwC as its auditor in 2015. Picture: Phil Wilkinson

Tesco suspended eight directors and the Serious Fraud Office charged three former executives with fraud after the black hole was discovered in the firm’s accounts. Tesco also ditched PwC as auditor in 2015, replacing it with rival Deloitte.

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Tesco announced in March that it will take a £235m hit after reaching an agreement with authorities over the scandal, which will see it make a hefty compensation payout to investors.

A court case against the three Tesco executives – Carl Rogberg, Chris Bush and John Scouler – is ongoing.

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