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22 Sep 2014 10:01am

Deloitte to investigate Tesco profit error

Supermarket giant Tesco has suspended four senior members of staff and called in Deloitte to investigate after admitting that profits were overstated by £250m

The mistake was spotted during final preparations of the store’s interim results, with Tesco saying the error occurred due to accelerated recognition of commercial income and delayed accrual of costs.

Deloitte has been called in to perform an independent review of the issues alongside Freshfields, Tesco’s external legal advisers.

PwC, the rival Big Four firm that published an independent auditor’s report for Tesco in May, declined to comment.

Dave Lewis, group CEO, said, “We have uncovered a serious issue and have responded accordingly. The chairman and I have acted quickly to establish a comprehensive independent investigation.

“The board, my colleagues, our customers and I expect Tesco to operate with integrity and transparency and we will take decisive action as the results of the investigation become clear.”

While four members of staff have been asked to stand aside as the investigation gets underway, the Guardian was able to confirm that Chris Bush, Tesco’s UK MD, was one of the suspended senior executives.

Tesco has experienced a turbulent 12 months. Share prices have fallen 40% in the last year and the group’s former CFO emeritus, Laurie McIlwee, stood down in April following an expected fall in profits.

Oliver Griffin

 

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