Tesco being monitored by UK accountancy regulator

Tesco is being monitored by the UK's accountancy watchdog, following Monday's admission that it overstated its half-year profit guidance by £250m.

The Financial Reporting Council (FRC) said it was "monitoring the situation closely," but would not act until Tesco's own investigation was completed.

The FRC can issue fines for misconduct.

It can also, via an independent panel, suspend individuals and firms from the professional accounting body.

"It will consider the outcome of the investigation announced by the company and determine whether it should take regulatory action," the FRC said in a statement.

However, the FRC said it did not have the powers to monitor or require restatement of unaudited trading statements, which do not have to be checked by an external accounting firm.

Tesco has already launched its own investigation into the issue, which is being carried out by Deloitte, together with Freshfields, the group's external legal advisers.

Tesco's auditor, PwC, has declined to comment on the supermarket chain's overstated profit forecast.