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    Report: U.S. Foodservice Suppliers Cited Problem

    WASHINGTON - Auditors at Deloitte & Touche became aware of potential accounting irregularities at U.S. Foodservice Inc. after at least two of the company's suppliers disputed rebate figures, the Washington Post reported on Wednesday, citing sources familiar with the situation.

    WASHINGTON - Auditors at Deloitte & Touche became aware of potential accounting irregularities at U.S. Foodservice Inc. after at least two of the company's suppliers disputed rebate figures, the Washington Post reported on Wednesday, citing sources familiar with the situation.

    How Maryland-based U.S. Foodservice, a unit of Dutch supermarket group Ahold, accounted for rebates from suppliers for selling large quantities of their products is at the heart of an accounting scandal that has rocked the company, the newspaper said.

    Deloitte, the outside auditor, was told by at least two suppliers in 2002 that they had paid less in rebates than the amount listed by U.S. Foodservice, the Post reported, citing sources.

    Deloitte informed the company of the discrepancy, suspended its audit for 2002 and later said it could no longer stand behind its audits for 2000 and 2001, the paper said.

    The report, citing another source, said U.S. Foodservice Chief Executive James Miller was the first to inform Ahold of the problems.

    A U.S. Foodservice spokesman declined comment, saying the matter is under investigation and the company is cooperating with investigators, the Post said. It also said a Deloitte spokeswoman declined comment, citing client confidentiality.

    The U.S. Securities and Exchange Commission and other U.S. authorities are investigating the company's finances. Ahold has also launched an internal investigation.

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