The Financial Reporting Council (FRC) has launched an investigation into the auditing of BT’s (LON:BT.A) financial statements, in the wake of a £530 accounting scandal in its Italian division.
The UK’s accountancy watchdog announced the investigation on Thursday, covering accounts compiled by PwC between the years 2015 to 2017. It comes after BT was found to have written down the value of its Italian unit by £530 million, after years of “inappropriate behaviour”.
BT shares plunged by over £7 billion back in January when the company revised the impact of the accounting scandal up from £145 million to £530 million. The problems initially came to light back in October of last year, but in January BT confirmed again that “the overstatement of earnings on our Italian business over a number of years”.
The FRC said on Thursday:”The decision to investigate follows announcements by BT in relation to accounting issues in its Italian operations.”
The body has powers to issue fines or bans to those found to be in serious breach of its rules.
BT have taken several hits over the past year, being hit by a £42 million fine and £300 million compensation bill after regulators uncovered failings at its Openreach division. Last month it announced that profits had fallen 19 percent to £2.4 billion, and that it would need to cut 4,000 jobs.
Shares in BT are currently trading flat, down 0.37 percent at 293.00 (1301GMT).