The UK’s accountancy watchdog has launched an investigation into PricewaterhouseCoopers over its auditing of WH Smith in the wake of a damaging accounting scandal in the retailer’s US division.
The Financial Reporting Council (FRC) said it had launched a probe into PwC’s audit of WH Smith’s financial statements for the year to August 31.
It did not disclose the details of the probe.
WH Smith admitted last year it overstated profits for its North American business by as much as £50 million because of issues with its audit process.
Former chief executive Carl Cowling resigned as WH Smith’s in November last year after an independent report by Deloitte confirmed the accounting problems, finding a number of “shortcomings” in its US audit process.
WH Smith remains under investigation by the Financial Conduct Authority (FCA) over the accounting issue.
The scandal led WH Smith to warn over profits for the year to the end of August 2025, which were also delayed over the affair.
A PwC spokesperson said: “We will be fully cooperating with the FRC’s investigation.
“The delivery of high-quality audits is fundamental for the firm and we are committed to maintaining high standards.”
WH Smith told investors in December that it had kickstarted a remediation plan to strengthen its governance and controls, ensure processes are aligned across the group and enact cultural change involving training and monitoring.
And earlier this year it hired the former boss of infrastructure giant Balfour Beatty as executive chairman, with an aim to help the group “return to stability” as it recovers from the debacle.
Leo Quinn started in the role on April 7, while interim chief executive Andrew Harrison will revert to his previous role as head of the firm’s UK division.
WH Smith is now focused solely on its 1,300 shops in global travel locations, including at airports and train stations, after selling its high street chain of about 480 shops to Hobbycraft owner Modella Capital in June last year.
As part of the deal, the WH Smith name has disappeared from British high streets and has been replaced by brand TGJones.
