The Financial Reporting Council (FRC) has announced it has dropped its investigation into Laurie McIlwee, former chief financial officer of Tesco, which followed on from the discovery of a £263m ‘black hole’ in its accounts the retailer said was caused by booking revenue from suppliers too early
In December 2014 the regulator announced an investigation under its accountancy scheme into the conduct of members and a member firm in relation to the preparation, approval and audit of the financial statements of Tesco 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.
It has now put out a statement saying the executive counsel to the FRC has concluded that ‘there is no realistic prospect that a tribunal would make an adverse finding in relation to the conduct of Mr Laurie McIlwee.’
The FRC said its investigation into a member firm and other members is ongoing. The member firm in question is PwC, which has been Tesco’s external auditor for more than three decades.
At the time it began its probe, the regulator said this would include questioning of ICAEW members from Tesco’s internal financial reporting team, as well as individuals within PwC.
Tesco's accounting practises are also being investigated by the Financial Conduct Authority (FCA) and the Serious Fraud Office (SFO).
The FRC declined to comment.
