Multinational grocery and general merchandise retailer Tesco announced it lowered down its profit forecast again for the third time this year.
The grocery giant revealed on Monday that it had yet again to cut its profit forecast this year.
Market value of Tesco shares went down 12 percent in early trade following the company's announcement on Aug. 29 that it had overestimated its first-half profit by 23 percent.
Tesco is the second largest retailer in the world has stores across the globe including countries like Asia, Europe and North America. It has been included in the FTSE-100 organizations, a share index consisting of 100 companies listed in the London Stock Exchange with the highest market capitalization.
Tesco reportedly cut its first-half profit outlook by 250 million pounds ($408.50 million).
The miscalculation was reportedly brought about by early booking of revenue and recognition of costs which was exposed while the company is preparing to release its revenue results.
The publication was then moved from Oct. 1 to Oct. 23 by the company's new chief executive Dave Lewis, who got the report from an "informed employee" on Friday.
Tesco reportedly suspended four of its employees following the major accounting issue facing the company.
Chris Bush, managing director of Tesco UK was reported to be one of the four suspended employees, according to BBC and Sky News.
Robin Terell, Tesco's multi-channel director will perform Bush's duties in Tesco UK while he is suspended from work.
"We have uncovered a serious issue and have responded accordingly. The chairman and I have acted quickly to establish a comprehensive independent investigation," as quoted by Lewis regarding efforts done to address the accounting blunder facing the company.
Tesco stated that it got its reports wrong by "overstating income and understating costs." The miscalculation was also brought about by the company not recording its payments as soon as it placed orders with suppliers, according to Reuters.
"Tesco has identified an overstatement of its expected profit for the half year, principally due to the accelerated recognition of commercial income and delayed accrual of costs," according to Tesco's official statement.
The accounting mishap affected the market value of Tesco shares as the stock declined by 8.5 percent to 209.8 pence on Monday.
