PwC Faces Investigation Over WH Smith Accounting Scandal
PwC under investigation over accounting scandal at WH Smith
Image: Mail Online
The Financial Reporting Council has initiated an investigation into PwC's audit of WH Smith following a significant accounting scandal that overstated profits by £30 million. WH Smith's former CEO resigned amid the fallout, and the company's shares have plummeted by 54% since the scandal's revelation.
- 01The Financial Reporting Council (FRC) is investigating PwC's audit of WH Smith's financial statements for the year ending August 31, 2024.
- 02WH Smith's former CEO, Carl Cowling, resigned after it was revealed that US profits were overstated by £30 million due to premature income reporting.
- 03The scandal led to a dramatic decline in WH Smith's share value, dropping nearly £600 million in one day and 54% overall since the announcement.
- 04Despite the controversy, WH Smith's CFO, Max Izzard, expressed confidence in PwC, emphasizing their long-standing relationship.
- 05The retailer is now led by Ian Quinn, who is tasked with addressing the fallout from the scandal and focusing on the US business.
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The Financial Reporting Council (FRC) has launched an investigation into PricewaterhouseCoopers (PwC) regarding its audit of WH Smith’s financial statements for the fiscal year ending August 31, 2024. This follows a scandal where WH Smith overstated profits in its US division by £30 million due to early income recognition from suppliers. The controversy led to the resignation of former CEO Carl Cowling and a staggering loss of £600 million in market value in a single day, with shares now down 54% since the scandal broke. Ahead of WH Smith's annual meeting, shareholder advisory group Pirc recommended that investors oppose the re-election of PwC, which has served as the retailer's auditor for over ten years. Despite the backlash, CFO Max Izzard reaffirmed confidence in PwC. WH Smith is now under the leadership of Ian Quinn, who is focused on restructuring the company, particularly its US operations, which have been expanded through acquisitions.
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The investigation into PwC and the fallout from the WH Smith scandal could affect investor confidence and the company's market position.
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