Tesco, one of the largest supermarkets in the United Kingdom is facing an accounting probe amid an overstatements of profit by $250m. The company is under scrutiny and is required to update with its interim results. Under this probe, the company has asked its employees to step aside. The record has been eight employees who were asked to stay out of Tesco. The employees hold a senior level position in the company. The purpose of this action was to carry out a full and true investigation into the probe. The company also beefed up the Board with new directors for different segments. The overstatement of profits show optimism for the future as well as the greed to show high profits.
The biggest supermarket chain is facing investigation from the Financial Conduct Authority. The overstatement of profit by a huge amount has raised various questions for the company. The investigation is being carried out and the company is to provide more details in the interim reports. The suspensions of senior level employees were not a disciplinary action, it was only aimed to carry out a proper investigation and bring out true details of the company. The overstatement of profits in the first half of the year brought about an inquiry into the business. The company is cooperating in the investigations and has warned other sectors of the reporting. This could have been due to manipulation of accounts or due to the greed of the management to show higher profits in lieu of optimism for the future. The company could be in trouble if the investigations do not come out properly and show the cause of an overstatement. Laying off of the senior level employees is solely for the reason of carrying out a true investigation into the matter.
Razak Musah Baba, P. E. (2014, Oct 14). Tesco asks more staff to step aside amid accounting probe. Retrieved from The Wall Street Journal: http://online.wsj.com/articles/tesco-asks-more-staff-to-step-aside-amid-accounting-probe-1413289769