Dave Lewis’s bid to detoxify Tesco continues. Today the supermarket confirmed reports it would be ditching PWC, its auditor of 32 years. The move is hardly surprising given the accounting scandal that engulfed Tesco last year, when it announced its profits had been overstated by £250m - a figure that was later revised up to £263m.
It’s normal for businesses to refresh their auditors from time to time, but according to the Independent, Lewis and Tesco chairman John Allan brought forward plans to put out the tender for new candidates by a year.
‘We have issued an invitation to tender for the appointment of an auditor,’ the supermarket said. ‘Taking into account the term for which PwC has served as auditor, we have agreed with them that they will not participate.’
Last year’s overstatement scandal is thought to have been caused by Tesco execs booking commercial income from suppliers that was dependant on meeting targets and was therefore unlikely to ever be received. In October it was reported that Tesco execs had deliberately hidden the practices from the supermarket’s auditors.
Lewis has pledged to ‘reset’ the supermarket’s relationship with suppliers, which has come under fire for more than just its impact on its books. The Groceries Code Adjudicator is investigating Tesco over claims its delayed payments to suppliers and took money for giving their products more prominent space on its shelves.
The supermarket, which last month unveiled its worst results ever, also remains under investigation by the Serious Fraud Office. The probe is likely to drag on for some time as the agency works to untangle the finer details of its books.
PwC will probably lament losing Tesco's business, but parting ways is a probably necessary step for both companies to move on from the scandal.