The chief executive officer (CEO) at WH Smith, Carl Cowling, has offered his resignation following accounting errors in the firm’s North America division earlier this year.

The travel retailer saw its share price plummet by over 40% in August, after it cut its group profit guidance for the full financial year by £30m.

This drop in its expectations followed an overstatement of expected headline trading profit in its North America division, which led to Deloitte being appointed to conduct an independent review.

The professional services firm released its review findings today, stating that the accounting treatment adopted by the North America division was not consistent with the group's stated accounting policy and consequently was not consistent with the requirements of the relevant accounting standards.

Furthermore, it said that WH Smith’s overstatement was "substantially a timing rather than existence issues", and relates to the application of accounting standards.

Deloitte concluded that WH Smith’s issues arose against a backdrop of a target-driven performance culture and decentralised divisional structure, combined with a limited level of group oversight in the finance processes in its North America division

As part of the findings, chair at WH Smith, Annette Court, apologised for the shortcomings identified.

She added: "While the issues identified arose in our North America division, we recognise the importance of strengthening controls, governance and reporting procedures across the group.

"We have acted swiftly to build a comprehensive remediation plan and will reinforce the financial discipline and integrity that underpin our business moving forward.

"It has also been announced today that Carl Cowling has offered his resignation. Carl will step down as group CEO and as a board director with immediate effect. We wish Carl every success in the future. The board has begun the search to appoint a new CEO.”

Following the findings, WH Smith lowered its North America full-year trading profit expectations from £25m to a range of £5m to £15m. Its previous market expectations before the accounting error announcement stood at £55m.

WH Smith added that its UK CEO, Andrew Harrison, will serve as interim group CEO while the recruitment process goes ahead.

Following the announcement, shares in WH Smith increased by over 7%.

Head of markets at AJ Bell, Dan Coatsworth, said that no CEO was going to "survive an episode as catastrophic" as the one faced by Cowling.

He concluded: "Cowling was clinging on to his job the second WH Smith announced an accounting setback in the summer, and now he’s done the decent thing and stepped down. Even if Cowling hadn’t resigned, his credibility at WH Smith was shattered by the scale of value destruction straight after selling the UK high street business. That strategic shift was meant to be a defining moment for the company, but it has gone down in history for the wrong reasons.

"WH Smith had pinned its future on the travel sector, running shops in airports and train stations to take advantage of a captive audience looking for snacks, books and electronic items. The retailer charges a premium for these goods because customers rarely have many options to shop around, and they have time limitations. While this proposition sounded straightforward, accounting issues have muddied the water."

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