Britain's FCA makes enquiries into WH Smith's overstated profits, FT reports
Nov 25 (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's chief executive 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 FCA said in a statement to FT.
"We are aware of the reports and we are engaging with the firm," the FCA said.
Reuters could not immediately verify the report. WH Smith did not immediately respond to a request 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 of its second largest division to about 25 million pounds, down from a previous forecast of about 55 million pounds.
The retailer said in August it was revising down its expected results due to the "accelerated recognition" of supplier income in its North America business.
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