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The financial watchdog has begun to make inquiries into a WHSmith accounting blunder which saw the company wipe almost £600 million off the company’s stock market value overnight.

Officials at the Financial Conduct Authority (FCA) has confirmed it has started to make inquiries into whether the firm had breached UK disclosure rules for listed companies, but the watchdog is yet to carry out a formal investigation into the matter.

A spokesperson told the Guardian : “We are aware of the reports and we are engaging with the firm."

WHSmith was forced to slice financial forecasts back in August, with an independent review led by Deloitte carried out after an accounting error was detected in its North American branch.

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