Britain's largest retailer reported a bigger than expected hole in its finances on Thursday after finding that accounting transgressions went back further than initially thought.

"The FRC is giving careful consideration to Tesco’s announcement of 23 October 2014 and will continue to gather information to determine whether it should take regulatory action," the watchdog said in a statement.

The watchdog has powers to sanction accounting firms and their staff for failing to apply book-keeping rules properly. PwC has been Tesco's auditor since 1983.

(Reporting by Huw Jones, editing by Carolyn Cohn)