FRC opens formal probe into PwC’s WHSmith audits

The UK’s Financial Reporting Council (FRC) has launched an probe into PricewaterhouseCooper's (PwC) audit of WHSmith aft the retailer’s accounts were recovered to see inflated gross and nett figures.

In a little connection connected 9 June, the FRC said that its Conduct Committee approved the enquiry connected 21 April 2026. The probe is related to WHSmith’s accounts for the fiscal twelvemonth ended 31 August 2024, the regulator added.

The probe volition beryllium carried retired by the Enforcement Division nether the Audit Enforcement Procedure.

WHSmith, which runs astir 1,300 outlets worldwide successful transport hubs and hospitals, chopped forecasts for its North American limb past twelvemonth aft reassessing however it booked supplier payments for promotions.

Some payments were recognised excessively early, inflating reported results and helping elder managers scope show targets.

According to the Financial Times report, PwC signed disconnected the accounts for the years successful which the overstatements occurred. The occupation was identified aft a subordinate of WHSmith’s concern squad came forward.

PwC, WHSmith’s auditor since 2015, said it volition afloat cooperate with the FRC, stating that “the transportation of high-quality audits is cardinal for the steadfast and we are committed to maintaining precocious standards”.

An autarkic reappraisal by Deloitte past twelvemonth recovered that WHSmith had overstated gross implicit respective years, starring to the resignation of CEO Carl Cowling.

PwC besides flagged the accounting errors successful WHSmith’s US business, lone aft the institution disclosed the contented successful August past year.

In December, the FRC opened a abstracted probe into WHSmith implicit imaginable breaches of UK listing and transparency rules. The regulator is besides investigating PwC’s audits of Digital 9 Infrastructure and Babcock.

"FRC opens ceremonial probe into PwC’s WHSmith audits" was primitively created and published by International Accounting Bulletin, a GlobalData owned brand.

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