(Reuters) -Britain’s financial regulator is making enquiries at WH Smith about accounting errors uncovered in the retailer’s U.S. business, the Financial Times reported on Tuesday, citing people familiar with the matter.
The Financial Conduct Authority’s inquiry comes after Carl Cowling stepped down as WH Smith CEO last week, following the findings of an independent review of the North America business’ leadership.
The watchdog is engaging with the firm and is yet to decide whether to open a formal investigation, the Financial Conduct Authority said in a statement to FT.
Reuters could not immediately verify the report. WH Smith and the FCA did not immediately respond to Reuters’ requests for comment.
The review, conducted in August, identified an overstatement of around 30 million pounds ($40.34 million) in expected headline trading profit, mainly due to supplier income in North America being booked too early.
The error prompted a cut in the profit outlook at its second largest division to about 25 million pounds, down from previous forecast of about 55 million pounds.
The retailer said in August it was revising down its forecasted results due to the “accelerated recognition” of supplier income in its North America business.
(Reporting by Preetika Parashuraman in Bengaluru; Editing by Sonia Cheema and Janane Venkatraman)
