Feeds

Tech Data: UK accounting errors cost us $27m

Distie giant restates 3 years worth of profits, beefs up fraud prevention weaponry

Choosing a cloud hosting partner with confidence

Tech Data (TD) has turned to "external experts" to beef up fraud detection measures after it emerged that righting accounting wrongs at its UK sub had wiped $27m (£16.55m) off net profits for the last three years.

The restatement equates to three per cent of income made during fiscal '11, '12 and '13, the periods that forensic bean counters probed since the mistakes in vendor accounting surfaced in March. The reduction came in at the lower range of initial estimates of between $25m to $33m.

The Audit Committee of independent investigators, and outside counsel, found systemic failings in the UK and two European country operations

"These adjustments primarily correct errors from improper vendor accounting, improper use of manual journal entries, and improper recognition of foreign currency exchange transactions," said TD.

The abacus strokers found inadequate controls over manual journal entries; inadequate account reconciliation processes and inadequate anti-fraud programme controls and monitoring.

In response to the findings, TD said certain UK and Euro staffers "responsible for accounting improprieties" have been shown the door, though it stopped short of naming names.

The Audit Committee have written to all workers to remind them of "ethical matters" and the imperative to comply with laws, Code of Conduct and company accounting policies.

Compensation programmes are to be changed to "better motivate accurate financial reporting and compliance", and tools to document, support and review manual journal entires, and centralise control and finance processes will be introduced.

And in a bid to head off future incidents, TD has "engaged external experts to perform the internal audit function and to assist with the implementation of specific fraud detection procedures".

A Chief Ethics and Compliance Officer has been appointed to evaluate other ways to prevent a re-occurrence of a costly and embarrassing debacle, and in currently reviewing the business structure.

"The company is in the process of evaluating its organizational structure, and roles and responsibilities to enhance controls and compliance," said TD.

NASDAQ-listed TD had until the end of next month to report restated financials for the three fiscal years in question or be booted off it.

The distributor hopes to hold an Annual Meeting of Shareholders for fiscal '13 - which must usually be held within 12 months of a financial year-end - as soon as it can file numbers for fiscal '14, which ended last month.

The company intends to outline its position "with respect to this deficiency" to the NASDAQ Listing Qualification Panel by 10 February to seek an extension period to 30 June.

During this extension it will solicit proxies and hold an annual meeting.

The distributor reiterated that it expects a VAT dispute with the Spanish government will cost $55.6m in various penalties and interest repayments, and is included on the Balance Sheet for fiscal '13. ®

Internet Security Threat Report 2014

More from The Register

next story
Bono apologises for iTunes album dump
Megalomania, generosity and FEAR of irrelevance drove group to Apple deal
HBO shocks US pay TV world: We're down with OTT. Netflix says, 'Gee'
This affects every broadcaster, every cable guy
Facebook, Apple: LADIES! Why not FREEZE your EGGS? It's on the company!
No biological clockwatching when you work in Silicon Valley
French 'terror law' declares WAR on the INTERNET itself, say digi-rights folks
Liberté, Égalité, Fraternité: Two out of three ain't bad
SCREW YOU, EU: BBC rolls out Right To Remember as Google deletes links
Not even Google can withstand the power of Auntie
Arab States make play for greater government control of the internet
Nerds told to get lost in last-minute power grab bid at UN meeting
Zippy one-liners, broken promises: Doctor Who on the Orient Express
Series finally hits stride, but Clara's U-turn is baffling
Don't bother telling people if you lose their data, say Euro bods
You read that right – with the proviso that it's encrypted
America's super-secret X-37B plane returns to Earth after nearly TWO YEARS aloft
674 days in space for US Air Force's mystery orbital vehicle
prev story

Whitepapers

Forging a new future with identity relationship management
Learn about ForgeRock's next generation IRM platform and how it is designed to empower CEOS's and enterprises to engage with consumers.
Win a year’s supply of chocolate
There is no techie angle to this competition so we're not going to pretend there is, but everyone loves chocolate so who cares.
Why cloud backup?
Combining the latest advancements in disk-based backup with secure, integrated, cloud technologies offer organizations fast and assured recovery of their critical enterprise data.
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?
Saudi Petroleum chooses Tegile storage solution
A storage solution that addresses company growth and performance for business-critical applications of caseware archive and search along with other key operational systems.