Closure of investigation into the conduct of members and a member firm as auditors of Tesco plc

News types: Investigations

Published: 5 June 2017

PN 26/17

The Financial Reporting Council (‘FRC’) announces the closure of its investigation into the conduct of PricewaterhouseCoopers LLP (‘PwC LLP’) and certain Members of the Institute of Chartered Accountants in England and Wales in their capacity as auditors of Tesco plc (‘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 LLP and certain Members in respect of the matters within the scope of the investigation. 
The investigation into certain other Members of the accountancy bodies is ongoing.
Notes to editors:
  1. The initial scope of the FRC’s investigation as announced on 22 December 2014 was as  follows:

“The conduct of Members and a Member Firm in relation to the preparation, approval and audit of the                  financial statements of Tesco plc for the financial years ended 25 February 2012, 23 February 2013 and              22 February 2014 and the preparation, approval and review of financial information relating to the 26                  weeks ended 23 August 2014 leading to the publication of the company’s interim results on 23 October              2014.”
  1. The FRC is the independent, investigative and disciplinary body for accountants and actuaries in the UK dealing with cases which raise important issue affecting the public interest.  In brief, the stages of the disciplinary process are:

  • Decision to investigate;

  • Investigation;

  • Decision whether to bring disciplinary proceedings against a Member Firm or Member and, if so decided, referral to a disciplinary Tribunal;

  • Tribunal hearing; and

  • Determination and imposition of sanction.

  1. The Accountancy Scheme (‘the Scheme’) provides that if at any stage during or following an investigation Executive Counsel considers that there is not a realistic prospect that a Tribunal will make an Adverse Finding against a Member or Member Firm, or a hearing is not desirable in the public interest, the Executive Counsel should inform the FRC’s Conduct Committee of his decision.  An Adverse Finding is defined in the Scheme as “a finding by a Disciplinary Tribunal that a Member or Member Firm has committed Misconduct”.  Misconduct is defined as “an act or omission or series of acts or omissions, by a Member or Member Firm in the course of his or its professional activities (including as a partner, member, director, consultant, agent or employee in or of any organisation or as an individual) or otherwise, which falls significantly short of the standards reasonably to be expected of a Member or Member Firm or has brought, or is likely to bring, discredit to the Member or Member Firm or to the accountancy profession.

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