Source: Sharecast
A review by Deloitte said treatment of supplier payments “was not consistent with the requirements of the relevant accounting standards”.
The retailer also cut headline trading profit guidance for North America to a range of £5m - £15m, down from the revised expectation of around £25m announced in August and previous market expectations of £55m.
WH Smith, which now operates as a travel outlet retailer in August slashed guidance for its North American operations, citing problems with the way it had recognised payments from suppliers when they ran promotions or discounts to help boost sales. The move saw £600m slashed from the company's value as its share price plunged 42%.
“Whilst the issues identified in the Deloitte review arose in our North American division, I recognise the seriousness of this situation and as group CEO feel it is only right that I step down from my position,” Cowling said in a statement.
WH Smith’s chair Annette Court said the company recognised “the importance of strengthening controls, governance and reporting procedures across the group.”
"Our priority now is to rebuild trust and credibility and to improve the performance and profitability of our North America division. We are confident that the actions we have taken and will continue to implement over the months ahead will ensure a strong foundation for the business going forward."
Reporting by Frank Prenesti for Sharecast.com