The UK's accountancy watchdog has launched an investigation into PricewaterhouseCoopers (PwC) over its auditing of WH Smith following a damaging accounting scandal in the retailer's US division. The Financial Reporting Council (FRC) announced it is probing PwC's audit of WH Smith's financial statements for the year ending August 31, though it did not disclose specific details of the investigation.
Last year, WH Smith admitted it had overstated profits for its North American business by as much as £50 million due to issues with its audit process. Former chief executive Carl Cowling resigned in November 2024 after an independent report by Deloitte confirmed the accounting problems, citing several shortcomings in the US audit process. The retailer remains under investigation by the Financial Conduct Authority (FCA) over the matter.
The scandal prompted WH Smith to issue a profit warning for the year to August 2025 and delayed its financial results. A PwC spokesperson stated: '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.'
In December, WH Smith informed investors that it had initiated a remediation plan to strengthen governance and controls, align processes across the group, and implement cultural change through training and monitoring. Earlier this year, the company appointed Leo Quinn, former boss of infrastructure giant Balfour Beatty, as executive chairman to help restore stability. Quinn assumed the role on April 7, while interim chief executive Andrew Harrison reverted to his previous position as head of the UK division.
WH Smith now focuses solely on its 1,300 stores in global travel locations, including airports and train stations, after selling its high street chain of approximately 480 shops to Hobbycraft owner Modella Capital in June 2024. As part of that deal, the WH Smith name disappeared from British high streets, replaced by the brand TGJones.
