Tech Data probe into accounting ‘errors’ wipes out £16m in profits

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The distributor has appointed a Chief Ethics and Compliance Officer after investigating improprieties between 2009 and 2013

Distributor Tech Data has announced the conclusion of its investigation into accounting improprieties at the company which wiped out £16 million in profits made over almost five years.

In March 2013 the distributor announced it would ‘restate’ three-years’ worth of financial results to correct accounting improprieties found in UK subsidiary Computer 2000’s accounts.

At the time it said the review of its accounts could see between $25m to $33m in profits being wiped out for fiscal years 2011, 2012 and 2013.

An independent investigation conducted by the audit committee of the board of directors has now concluded, revealing the true extent of the accounting mistakes for the first time.

The results show Tech Data also investigated fiscal years 2009 and 2010.

Between fiscal 2009 and 2013, profits have had to be reduced by $27 million (£16 million), or three per cent of its originally reported income.

The distributor said the restatement did not impact its balance sheet or cash flow.

Changes

The investigation found its UK subsidiary and two others had made mistakes in the way they filed accounts – including “improper use of manual journal entries” and “improper recognition of foreign currency exchange transitions”.

As a result, several employees were fired following suspension and Tech Data has increased communication with employees regarding its values and requirement to comply with laws.

The company has also appointed a Chief Ethics and Compliance Officer to ensure legal compliance.

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