Accounting watchdog to probe BT's Italian accounts

The Financial Reporting Council has launched an investigation into PricewaterhouseCoopers' audit of BT's financial statements for 2015 to 2017 after the company found a £530m black hole in its Italian accounts.

The FRC, which is responsible for promoting high quality corporate governance, said its decision to investigate "follows announcements by BT in relation to accounting issues its Italian operations".

BT announced back in January that the impact of an accounting scandal in its Italian division was worse than it had initially expected, with the write-down estimated at up to £530m versus £145m previously.

The company said at the time: "The improper behaviour in our Italian business is an extremely serious matter, and we have taken immediate steps to strengthen the financial processes and controls in that business. We suspended a number of BT Italy's senior management team who have now left the business. "

It also appointed a new chief executive of BT Italy, who took charge on 1 February.

BT issued a profit warning at the time, saying earnings before interest, tax, depreciation and amortisation would take a £175m hit for the year.

At 1025 BST, BT shares were up 0.1% to 294.50p.