WH Smith’s ‘Basic’ Accounting Error Puts Auditor in the Hot Seat

An investigation untangling the accounting errors that led UK retailer WH Smith to vastly overstate its projected annual profit also puts a spotlight on its auditor, PwC.

Shares in WH Smith Plc crashed by more than 40% after it more than halved profit forecasts for its North America stores to around £25 million ($34 million) from £55 million for the year that ended Aug. 31. Revenue from suppliers was accounted for “in earlier periods than it should have been,” the company said in an emailed statement explaining the mistake. Overall the company cut profit forecasts for the year to £110 ...