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(Sharecast News) - The Financial Reporting Council opened an investigation into PwC's audit of WH Smith's accounts for the year ended 31 August 2024 on Tuesday, adding to regulatory scrutiny of the travel retailer after it disclosed inflated earnings in its North American business.
The UK accounting watchdog said on Tuesday that its Conduct Committee had decided on 21 April to begin an investigation into the statutory audit carried out by PricewaterhouseCoopers LLP of WH Smith's consolidated financial statements for the 2024 financial year.
The FRC said the investigation would be conducted by its Enforcement Division under the Audit Enforcement Procedure.
It did not specify the focus of the probe and stressed that opening an investigation did not mean it had made, or would make, any finding of breach.
The regulator said the investigation related only to the relevant statutory auditor or audit firm, and not to any other persons or entities.
Reuters reported that PwC has been WH Smith's auditor since 2015.
A PwC spokesperson said: "We will be fully cooperating with the FRC's investigation."
WH Smith declined to comment.
The company is due to publish a trading update on Wednesday.
The FRC probe came after the Financial Conduct Authority launched a separate investigation in December into potential breaches of listing and disclosure rules at WH Smith.
That followed the retailer's discovery of inflated earnings at its North American business.
WH Smith had also been under pressure from a weaker consumer backdrop linked to the Iran war.
In April, the company suspended its dividend and cut its annual profit forecast.
At 0939 BST, shares in WH Smith were up 1.52% at 507.18p.
Reporting by Josh White for Sharecast.com.
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