WH Smith will recover overpaid bonuses after an investigation was launched into accounting errors within the US arm of the company.

Britain’s financial watchdog, the Financial Conduct Authority (FCA), is looking into the company’s accounting blunder which overstated profits in the US by as much as £50 million.

Carl Cowling resigned from his position as WH Smith’s chief executive after Deloitte confirmed the accounting issues.

The retail shop pushed back, announcing yearly results twice before disclosing it was under investigation by the FCA today.

Saying it would apply “malus and clawback” to recover overpaid former executive directors, who received as much as £50m in bonuses, despite WH Smith announcing last year that it would cut a large number of shops on British high streets.

Andrew Harrisson, WH Smith’s interim boss, said: “It has been a difficult end to the year for the group.

“The board and I are acutely aware that we have much to do to rebuild confidence in WH Smith and deliver stronger returns as we move forward.”