Shares of the second biggest retailer in the world are getting smacked today, illustrating yet again just how hard is to get a merchant on the right track once things start going south.

The company is Tesco (TESO) and the stock is down by some 10% today after the company said it had uncovered "a serious issue" with its accounting. Brand new Tesco CEO Dave Lewis says the company has suspended four executives after it realized the accounting inaccuracies had led the company to overstate its guidance for this fiscal year by more than $400 million.

It's Tesco's third profit warning in just three months and fourth since 2012. Tesco, however, had problems before it started taking liberties with its financial statements. Over the last five year Tesco has grown its top line by nearly 15% to $115 billion earnings have collapsed by nearly 20%.

Tesco's real problems started long before today. In 2007 Tesco rolled out a chain of stores called Fresh and Easy in the American southwest. The stores were small footprint discount retail operations, just like those dollar stores that are making so much money. In Tesco's case though, the company ended up taking a $2 billion write-down.

Retail is detail. Despite being smart merchants who did a lot of homework Tesco simply couldn't figure out how to make Fresh and Easy stores feel "American." Customers stayed away in droves.

Tesco will figure out how to run its stores in the UK. The rule of thumb is never buy the dip on the first news of accounting problems, but Tesco is starting to take shape here. The bigger lesson is to be wary of companies coming in promising to dazzle foreign markets with their special form of capitalism. If Target (TGT) execs had been paying attention to Tesco they could have saved themselves a lot of pain in Canada. As an investor, it pays to be skeptical of foreign expansion as your only source of growth.