O.DEPOT SACKS 4 AFTER ACCOUNTING REVIEW

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O.DEPOT SACKS 4 AFTER ACCOUNTING REVIEW

 user 2007-11-14 at 10:59:00 am Views: 44
  • #21053

    Depot sacks four after accounting review
    November
    2007 — Delray Beach (FL): Office Depot has identified “a material
    weakness in its internal controls” and has sacked four members of its
    merchandising staff following the release of the Audit Committee’s
    findings from a review of the company’s accounting for certain vendor
    programme funds.The investigation revealed errors in timing of vendor
    programme recognition and included evidence that some individuals
    within the company’s merchandising organisation failed to provide
    Depot’s accounting staff with complete or accurate documentation of
    future purchase or performance conditions in certain vendor programmes
    that would have required recognition of the related vendor funds to be
    deferred into future periods.

    The Committee said that during the
    period beginning in Q3 2006 and ending Q2 2007 funds due, or received,
    from vendors previously recognised in the current quarter should have
    been deferred into later periods.The anticipated impact of these errors
    will reduce gross profit, operating profit, net earnings and EPS in
    prior quarters and will result in related amounts being recognised in
    future periods. Depot estimates that it will reduce diluted EPS by
    $0.02 in Q3 2006, $0.03 in Q4 2006, $0.01 in Q1 2007, and $0.02 in Q2
    2007. The diluted EPS impact of approximately $0.07 per share will be
    recognised beginning in the second half of 2007 and in decreasing
    amounts in years from 2008 through 2010.Depot anticipates making all
    necessary filings and releasing its delayed Q3 2007 results by the end
    of November but an exact date has yet to be confirmed.