Tech Data finds accounting "improprieties"
Tech Data Corporation will be restating its previous financial statements due to “improprieties” with how vendor accounting was reflected at Computer2000, its UK subsidiary.
The distributor will restate some or all of its previously issued quarterly and audited annual financial statements for the fiscal years 2011, 2012 and 2013.
It is estimated that the restatement will reduce previously reported consolidated operating income by around $30 million to $40 million, and consolidated net income by around $25 million to $33 million, over the three fiscal year periods.
Tech Data made the decision following discussions with its accountants, Ernst & Young LLP, which led the US firm to warn investors that they should no longer rely upon its previously released financial statements relating to that period.
"The company anticipates that the restatement will be made to correct improprieties primarily related to how the company's UK subsidiary reflected vendor accounting," a Tech Data spokesperson said.
"These preliminary estimates are based on currently available information and are subject to change during the course of the company's ongoing investigation. As a result of this investigation, the company is in the process of evaluating deficiencies in its internal controls over financial reporting."
Robert Dutkowsky, Tech Data's Chief Executive Officer, said the company was working to resolve the matter as soon as possible.
"We do not plan to comment further during the course of the investigation unless any material developments arise," he said.