Tesco dodgy dealings?

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Discussion

Vee

3,099 posts

235 months

Sunday 28th September 2014
quotequote all
Wills2 said:
Tesco aren't bad payers in terms of time but they are "debit note happy"

Absolutely. And you try speaking to the team in India to get it resolved - practically impossible. Only when there is some scale to the dispute will the buyer get involved.
Having experienced their practices being a supplier to Tesco with a plc and a smaller organisation, I think there will be few people outside their employees and families who have any sympathy at the moment.


Edited by Vee on Sunday 28th September 09:53

crankedup

25,764 posts

244 months

Sunday 28th September 2014
quotequote all
Where are those posters who were proffering how good Tesco management are/were in the thread that I opened 'Tesco - another fail'. Still say they are good, just goes to show what a load of b*llocks some people pronounce in here. Good my a*se.

jbswagger

734 posts

202 months

Monday 22nd December 2014
quotequote all
http://www.bbc.co.uk/news/business-30575040

Tesco accounts face fresh inquiry

Scuffers

20,887 posts

275 months

Monday 22nd December 2014
quotequote all
jbswagger said:
http://www.bbc.co.uk/news/business-30575040

Tesco accounts face fresh inquiry
at what point do the auditors get a roasting for signing the accounts off?


tobster

653 posts

210 months

Monday 22nd December 2014
quotequote all
Scuffers said:
jbswagger said:
http://www.bbc.co.uk/news/business-30575040

Tesco accounts face fresh inquiry
at what point do the auditors get a roasting for signing the accounts off?
They are, the FRC are looking into the preperation, approval and audit of Tesco's accounts. This could be very bad news for their auditors.

https://www.frc.org.uk/News-and-Events/FRC-Press/P...


lauda

3,486 posts

208 months

Monday 22nd December 2014
quotequote all
Scuffers said:
jbswagger said:
http://www.bbc.co.uk/news/business-30575040

Tesco accounts face fresh inquiry
at what point do the auditors get a roasting for signing the accounts off?
It depends whether the accounts are materially wrong or just wrong. I'd wager that every set of accounts of every company in the FTSE 100 are 'wrong' in that they contain errors of one sort or another but it's only a problem if they're wrong by a material amount.

It will also depend on how the error arose, what questions were asked, what representations were received from management and whether there would have been a reasonable expectation that a well-planned and executed audit should have picked them up. Lots of unknowns in there at the moment but I imagine that PwC are looking very closely at what happened. Time will tell.

Adrian W

13,893 posts

229 months

Monday 22nd December 2014
quotequote all
I read that as maybe, just maybe Tesco did nothing wrong from an accounting point of view.

And maybe the Sun etc should stop trying to crucify this very successful British company and support them instead.


Even better maybe David Cameron should do that as well rather than welcoming Aldi's expansion in the UK.......idiot

Imagine the French or German prime ministers doing that

schmunk

4,399 posts

126 months

Monday 22nd December 2014
quotequote all
lauda said:
I'd wager that every set of accounts of every company in the FTSE 100 are 'wrong' in that they contain errors of one sort or another but it's only a problem if they're wrong by a material amount.
Correct, and for a company so large, materiality can be set in the millions of pounds - i.e. a £1,000,000 error is just swept under the carpet as 'not worth bothering about'.

From https://www.accountancylive.com/tesco-mis-statemen...

"In Tesco’s 2013 audit report the level of materiality for the group as a whole is disclosed by the auditors as being £150m which represents 5% of adjusted profits.

Additionally, Tesco’s auditor, PwC, reports that it agreed with the audit committee that it would report misstatements identified during the audit above £7m, as well as misstatements below that amount that for qualitative reasons should be reported in the auditor’s opinion."

ninja-lewis

4,245 posts

191 months

Monday 22nd December 2014
quotequote all
lauda said:
Scuffers said:
jbswagger said:
http://www.bbc.co.uk/news/business-30575040

Tesco accounts face fresh inquiry
at what point do the auditors get a roasting for signing the accounts off?
It depends whether the accounts are materially wrong or just wrong. I'd wager that every set of accounts of every company in the FTSE 100 are 'wrong' in that they contain errors of one sort or another but it's only a problem if they're wrong by a material amount.

It will also depend on how the error arose, what questions were asked, what representations were received from management and whether there would have been a reasonable expectation that a well-planned and executed audit should have picked them up. Lots of unknowns in there at the moment but I imagine that PwC are looking very closely at what happened. Time will tell.
Furthermore The material misstatement was in a half-year trading update to markets, which goes nowhere near the auditors. The auditors would review the Interim Management Statement (a review provides Limited Assurance vs the Reasonable Assurance of an audit) but the error was caught internally fairly quickly).

The 2013 and 2012 statutory accounts reportedly contained misstatements (£70 million quoted I think) but they were below materiality.

sleep envy

62,260 posts

250 months

Monday 22nd December 2014
quotequote all
Adrian W said:
I read that as maybe, just maybe Tesco did nothing wrong from an accounting point of view.

And maybe the Sun etc should stop trying to crucify this very successful British company and support them instead.


Even better maybe David Cameron should do that as well rather than welcoming Aldi's expansion in the UK.......idiot

Imagine the French or German prime ministers doing that
It depends entirely on how you measure success.

If you're talking about bottom line and dividend at the cost of squeezing their suppliers until the pips squeak, saturation to the point where they admit over expansion and ruthless treatment of their own staff, then yes, they're fabulously successful.

I'd rather go hungry than shop with them.

lauda

3,486 posts

208 months

Monday 22nd December 2014
quotequote all
ninja-lewis said:
Furthermore The material misstatement was in a half-year trading update to markets, which goes nowhere near the auditors. The auditors would review the Interim Management Statement (a review provides Limited Assurance vs the Reasonable Assurance of an audit) but the error was caught internally fairly quickly).

The 2013 and 2012 statutory accounts reportedly contained misstatements (£70 million quoted I think) but they were below materiality.
Yeah, but let's not let facts like that get in the way of a good old witch-hunt.

crankedup

25,764 posts

244 months

Monday 22nd December 2014
quotequote all
Jeeeeeeez, where is the share price going to bottom out, currently 180p. Got to be worth a long term punt but when to start dripping in.

schmunk

4,399 posts

126 months

Monday 22nd December 2014
quotequote all
lauda said:
ninja-lewis said:
Furthermore The material misstatement was in a half-year trading update to markets, which goes nowhere near the auditors. The auditors would review the Interim Management Statement (a review provides Limited Assurance vs the Reasonable Assurance of an audit) but the error was caught internally fairly quickly).

The 2013 and 2012 statutory accounts reportedly contained misstatements (£70 million quoted I think) but they were below materiality.
Yeah, but let's not let facts like that get in the way of a good old witch-hunt.
N.B. the materiality limit for fraud is zero.

Megaflow

9,444 posts

226 months

Monday 22nd December 2014
quotequote all
crankedup said:
Jeeeeeeez, where is the share price going to bottom out, currently 180p. Got to be worth a long term punt but when to start dripping in.
I started dripping in about 18 months ago when I thought the news couldn't get much worse.

I was wrong. I was *very* wrong...

Adrian W

13,893 posts

229 months

Monday 22nd December 2014
quotequote all
sleep envy said:
It depends entirely on how you measure success.

If you're talking about bottom line and dividend at the cost of squeezing their suppliers until the pips squeak, saturation to the point where they admit over expansion and ruthless treatment of their own staff, then yes, they're fabulously successful.

I'd rather go hungry than shop with them.
I'm not a fan, but do you really think that if the countries largest private employer went out of business it would be s good thing?

Pit Pony

8,655 posts

122 months

Monday 22nd December 2014
quotequote all
When my accountant, failed to record a large pension payment that was made by cheque just before the end of my financial year, but not cashed by my pension company until after the end, thus overstating my profit by £5K, he said humorously "Well it just means that your profit will be £5K lower next year." (We agreed to put it right before submission to HMRC)

If Tesco are overstating profit one year, surely it evens out the next? More or less. And it means they have to pay corporation tax early, which can only be good for GB Plc.

sleep envy

62,260 posts

250 months

Monday 22nd December 2014
quotequote all
Adrian W said:
I'm not a fan, but do you really think that if the countries largest private employer went out of business it would be s good thing?
I wouldn't weep and nor do I care.

lauda

3,486 posts

208 months

Monday 22nd December 2014
quotequote all
schmunk said:
N.B. the materiality limit for fraud is zero.
It is if you happen to discover one. That doesn't mean that an auditor is expected the design an audit that would detect an immaterial fraud.

s2kjock

1,691 posts

148 months

Monday 22nd December 2014
quotequote all
Pit Pony said:
If Tesco are overstating profit one year, surely it evens out the next? More or less. And it means they have to pay corporation tax early, which can only be good for GB Plc.
If it was a one off "error" or fudge it would as you say even out.

The problem is that these sorts of things need to be perpetuated, and in what is already no doubt a complex accounting process, they can be "obscured" for some time. ie they overstate each year so big variances not necessarily apparent. Will catch up with you eventually though.

Different to the simple cock-up by your accountant.

Adrian W

13,893 posts

229 months

Tuesday 23rd December 2014
quotequote all
sleep envy said:
Adrian W said:
I'm not a fan, but do you really think that if the countries largest private employer went out of business it would be s good thing?
I wouldn't weep and nor do I care.
Why comment in the first place then