Tesco PwC accounts probe called off

The Financial Reporting Council (FRC) has announced that it is ending its inquiry into Tesco's accounts for 2012, 2013 and 2014.

The FRC is an independent disciplinary body for accountants and actuaries in the UK.

Its two-and-a-half-year investigation looked at business services giant PwC's auditing of Tesco's accounts.

However, it said it had concluded there was "not a realistic prospect" that PwC would be found guilty of misconduct.

At the same time, the FRC said it was continuing to investigate other chartered accountants in connection with Tesco's accounts.

PwC said: "We co-operated fully during the FRC's thorough investigation and are pleased that the FRC has closed it without any further action."

Auditors switched

The investigation stemmed from Tesco's 2014 accounting scandal, in which profits were overstated by £326m.

Tesco said it had incorrectly booked payments from its suppliers.

In January last year, the Grocery Code Adjudicator, Christine Tacon, found that Tesco "knowingly delayed paying money to suppliers in order to improve its own financial position".

In March this year, Tesco was fined £129m over the affair. It also agreed with the Financial Conduct Authority (FCA) to spend £85m on compensating investors.

PwC is no longer Tesco's auditor, having been replaced by Deloitte in 2015.