Macy’s said it had to delay its 3rd quarter earnings report after one accounting employee hid $154 million in delivery expenses.
It is unclear how one employee was able to hide this ‘error’ for three years from the retailer’s auditor, KPMG.
It is important to note that KPMG has been embroiled in numerous scandals over the years including being accused of covering up fraud in the collapse of New Century, a large Southern California-based REIT that filed Chapter 11 bankruptcy in 2007.
The unidentified accounting employee no longer works for Macy’s.
Macy’s said the so-called accounting error did not impact its cash management or payments to vendors.
The Wall Street Journal reported:
Macy’s M -2.21%decrease; red down pointing triangle delayed its quarterly results after the company discovered that an employee had hidden up to $154 million in corporate delivery expenses over several years, prompting an investigation.
The retailer said Monday that a single employee, responsible for small-package delivery expense accounting, had intentionally made erroneous bookkeeping entries since late 2021.
The individual didn’t pocket the amounts in question and the company declined to say how it uncovered the erroneous entries or how it went undetected by the company’s auditor, KPMG. Macy’s said it would provide details on its investigation when it reports quarterly results on Dec. 11.
“While Macy’s cannot control the actions of every employee, it is worrying that these are intentional accounting errors that go back to 2021,” said Neil Saunders, managing director of research firm GlobalData. “It also raises the question as to the competence of the company’s auditors.”
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