Target's managing director Stuart Machin has resigned, as parent company Wesfarmers investigates claims of accounting issues in its most recent half-year results.

Key points: Stuart Machin says moving on "right thing" as accounting issues happened on his watch

Stuart Machin says moving on "right thing" as accounting issues happened on his watch Wesfarmers launches comprehensive investigation into accounting problems

Wesfarmers launches comprehensive investigation into accounting problems Target reportedly agreed to give suppliers additional rebates in return for higher price guarantee

In a statement to the Australian Securities Exchange, Wesfarmers said Mr Machin had decided to resign after eight years with Coles and then Target.

"During my tenure at Target, although the financial results were frustratingly disappointing, I feel we made enormous progress in reshaping a very troubled business," Mr Machin said in the statement.

"Latterly, I have been dismayed to learn of the accounting issues at the half-year.

"I was not aware of these, but they happened on my watch, and as managing director I accept my share of the responsibility.

"The right thing now is for me to move on."

Wesfarmers' managing director Richard Goyder said he had accepted Mr Machin's resignation.

"Stuart made a substantial contribution to the turnaround of Coles as operations director and put a great effort into working to rebuild Target," he said in the ASX statement.

"Consistent with my experience of working with Stuart, he has cooperated well with the investigation."

Wesfarmers said it had acted promptly to launch a comprehensive investigation since concerns were raised regarding Target's accounting for commercial income as at December 31, 2015.

Reports emerged last week that Wesfarmers was looking into deals with about 30 international suppliers, which helped to boost Target's earnings by about $12 million, or 25 per cent, in the six months to the end of December last year.

It is understood Target had agreed to give suppliers additional rebates in return for a guarantee of higher prices before the end of the financial year.

Wesfarmers also said issues were raised regarding Target's accounting for commercial income for the six months to the end of December.

The company said the outcome of the probe would be finalised soon.

Earlier this year, Wesfarmers revealed a restructure that brought both Target and Kmart under a single department stores division.

Kmart's chief executive Guy Russo was selected to head up the division, in the hope he would turn around Target's fortunes in the same way he had done for Kmart.