This means the agency’s record half-year loss of £2.6bn reported in August has been corrected to a loss of £2.9bn.

In a regulatory statement filed with the US Securities and Exchange Commission (SEC), WPP said it and auditors Deloitte had determined that previously issued financial statements contain errors with respect to certain aspects of the application of IAS 32 Financial Instruments: Presentation and IAS 39 Financial Instruments: Recognition and measurement.

The mistakes relate to reporting for the years ended December 31, 2019, 2018 and 2017, and for each of the interim half year periods ended June 30, 2020 and 2019.

Specifically, for these years the presentation of cash and overdrafts within notional cash pooling arrangements did not meet the requirements for offsetting in accordance with IAS 32.

In addition, net investment hedging was inappropriately applied against certain foreign exchange exposures, where the relationship was either an ineligible hedging relationship under IFRS or insufficiently documented, such that the criteria to apply hedge accounting under IAS 39 were not met.

However, the company said the adjustments arising from these items will have no impact on any of WPP's headline measures, operating profit, net debt, net assets, net current liabilities or statement of cash flows.

The adjustments to correct the notional cash pooling matters will be limited to balance sheet adjustments in both cash and short-term deposits and bank overdrafts, bonds and bank loans that result in an expected aggregate increase in both of £5.899bn, £6.833bn, £7.24bn and £6.214bn in the company’s balance sheets as at 30 June 2020, 31 December 2019, 30 June 2019 and 31 December 2018, respectively.

WPP said it intends to change its cash pooling arrangements during 2021 such that certain cash and overdrafts will be settled or offset, mitigating the impact of the mistakes in future periods.

The adjustments to correct the net investment hedging matters will result in reclassifying exchange adjustments on foreign currency net investments within the company’s statement of comprehensive income to be reported, together with revaluation of financial instruments on the face of the company’s income statement as revaluation and retranslation of financial instruments.

They are expected to involve a £301.1m loss and £8.9m gain for the interim half year periods ended 30 June 2020 and 2019, respectively, and £245.7m gain, £205.1m loss and £194.6m gain for the years ended 31 December  2019, 2018 and 2017, respectively.

WPP said appropriate corresponding adjustments to other reserves and retained earnings on the company’s balance sheet and statement of changes in equity will be made, though there will be no impact on net assets.

According to WPP’s 2019 annual report, Deloitte has been the group’s external auditor since 2002.

The Big Four firm was paid a total of £42.7m for the year. This was made up of £1.5m for auditing the company’s annual accounts; £28m for auditing its subsidiaries; £5m for ‘other services pursuant to legislation’; and £8.2m in non-audit fees.

The report noted that ‘although there is no immediate intention to tender the audit contract, the company will re-tender at the latest by the 2022 year-end in compliance with the transitional arrangements for competitive tender that require mandatory rotation after the 2023 fiscal year-end.’