Freshfields and Deloitte to review Tesco accounts after profits overstated by £250m
Freshfields Bruckhaus Deringer has been called in by Tesco to review accounting failings which led to the supermarket chain overstating its profit forecasts for the first half of 2014 by an estimated £250m.
September 22, 2014 at 09:52 AM
2 minute read
Freshfields Bruckhaus Deringer has been called in by Tesco to review accounting failings which led to the supermarket chain overstating its profit forecasts for the first half of 2014 by an estimated £250m.
The magic circle firm, acting alongside Deloitte, is set to undertake an independent and comprehensive review of the overstatement, which Tesco has put down to "accelerated recognition of commercial income and delayed accrual of costs".
The issues were first raised by a whistle-blower and have led to the suspension of Tesco's UK managing director and three other senior executives, according to a report by The Times.
Tesco is trying to establish the full extent of the overstatement and how it will affect full year results, with an update expected when the firm announces interim results on 23 October.
Freshfields has a longstanding relationship with Tesco for a variety of work. Last year the firm advised Tesco on a proposed joint venture with China Resources Enterprise (CRE) to give the supermarket chain a greater foothold in mainland China.
In August 2012, the firm had a role in establishing Harris & Hoole, a new coffee business backed by Tesco, before securing a partial victory later that year in an appeal Tesco launched against Office of Fair Trading dairy price fixing allegations.
The firm's main client relationship partner is Claire Wills, head of Freshfields' retail sector group in London.
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