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Accounting watchdog launches Tesco investigation

Tesco announced in September that it had discovered an accounting problem. Credit: Rui Vieira/PA

The accounting watchdog has launched an investigation into a £263 million overstatement of profit expectations at Tesco.

The Financial Reporting Council (FRC) said its investigation will focus on "the preparation, approval and audit" of financial figures reported and prepared by Britain's biggest supermarket and its auditor, PwC.

The scandal is already being investigated by the Serious Fraud Office and has seen a number of Tesco executives suspended - some of whom have now left.

Chairman Sir Richard Broadbent has also announced he is to step down.

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Accounting watchdog 'considering' Tesco action

Accounting watchdog the Financial Reporting Council has said it is "giving careful consideration" to whether it should take regulatory action against Tesco after the company overstated its profits for the first half of this year.

In a statement the Council said: "The FRC is giving careful consideration to Tesco’s announcement of 23 October 2014 and will continue to gather information to determine whether it should take regulatory action."

Tesco confirms SFO probe over £263m profit overstatement

Tesco has confirmed that the Serious Fraud Office has launched an investigation into its accounting practices.

In a statement, the group said: "Tesco confirms that it has been notified by the Serious Fraud Office that it has commenced an investigation into accounting practices at the company. Tesco has been co-operating fully with the SFO and will continue to do so.

"Tesco has been notified by the Financial Conduct Authority that, in light of the SFO investigation, its investigation will be discontinued."

Serious Fraud Office to investigate Tesco irregularities

The Serious Fraud Office is set to open an investigation into how Tesco misstated its profits by £263m, ITV News understands.

The company overstated its profits for the first half of this year, with new CEO Dave Lewis saying the mis-statement was due to booking income in the wrong accounting period.

Tesco is facing a possible probe from the Serious Fraud Office. Credit: Chris Radburn/PA Wire

Five of the company's executives have been suspended over the issue and city regulators are already investigating what went on.

Tesco CEO: Shoppers can expect positive surprises

The new chief executive of Tesco has said shoppers can expect "positive surprises" as he gets the supermarket back "to what made this business great".

Dave Lewis told ITV News Economic Editor Richard Edgar that the accounting scandal that has enguled Tesco was "not at all what I envisaged when I took the job".

But he stressed that the company's 320,000 staff had continued to do a "stunning job" throughout the recent difficulties.

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ONS: Supermarket spending 'flat' since May 2013

Spending in British supermarkets has been "essentially flat" since May of last year, according to the Office of National Statistics (ONS).

According to the ONS 'non-specialised food stores' such as Tesco and Sainsbury's account for the vast majority of food spending.

Food spending accounts for 40% of all retail sales in the UK, the ONS added.

The ONS graph shows supermarket spending flatten out over the last year. Credit: ONS

This marks a contrast from the years leading up to 2013, where growth in spending has been strong, with a particularly rapid surge between 2006 and 2009.

The second graph shows the quantity of goods bought in all retail and specifically in supermarkets. Credit: ONS

Some of that previous growth may have been accounted for by food price inflation, as customers's spending has risen despite the quantity of goods they buy remaining more or less the same.

Tesco: No personal gain from accounting errors

Tesco has said no bonuses were paid to its executives during the period that a huge accounting error took place.

The company overstated its profits for the first half of this year by £263m, with Tesco CEO Dave Lewis saying the mis-statement was due to booking income in the wrong accounting period.

ITV News Economics Editor Richard Edgar is following developments.

Tesco withholds payment from former CEO Phil Clarke

Supermarket giant Tesco is withholding payments for its former chief executive, Phil Clarke, as an investigation into overstating profits continues.

The company announced today that it had overstated its profits for the first half of this year by £263m, slightly higher than the £250m originally estimated.

ITV News Economics Editor Richard Edgar is following developments.

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