The Target boss, Stuart Machin, has quit his position with immediate effect as investigations continue into allegations the department store artificially boosted profits via deals with suppliers.

In an announcement released to the Australian Stock Exchange on Friday, Machin said he was “dismayed to learn of the accounting issues” and had decided to resign.

Wesfarmers – which owns the Target business – is investigating allegations that Target used supplier rebate deals to artificially boost its earnings for the first half of 2015-16.

“I have been dismayed to learn of the accounting issues at the half year,” Machin said in the statement.

“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 is now for me to move on.”

Machin said he felt he had made enormous progress reshaping “a very troubled business” at Target.

The Wesfarmers managing director, Richard Goyder, said he had accepted Machin’s resignation and the outgoing Target boss “has cooperated well with the investigation”.

Machin had been with Wesfarmers – first at Coles, then at Target – for eight years.

In the statement, Wesfarmers said it had acted promptly to investigate the concerns raised about Target’s accounting for commercial income.

The outcome of the investigation is expected to be revealed soon.