The City watchdog has contacted WH Smith to find out more about its accounting error that wiped almost £600m off the company’s stock market value overnight and led to the departure of its chief executive.

The Financial Conduct Authority (FCA) said it had started making inquiries to assess whether the company had breached UK disclosure rules for listed companies, but was yet to launch a formal investigation.

“We are aware of the reports and we are engaging with the firm,” a spokesperson said.

The newspaper, books and stationery chain cut financial forecasts in August and launched an independent review led by Deloitte after it discovered an accounting blunder at its North American arm.

The revelation came just a few months after the chain sold its high street business , which has s

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