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AMSTERDAM, The Netherlands - Royal Ahold NV told federal regulators on Thursday that its accountant, Deloitte Touche Tohmatsu, no longer stands behind its audits for 2000 and 2001. The latest announcement raises questions about whether problems with the company's financial statements began earlier than had been acknowledged.
A source familiar with the case said that the company's internal probe is focusing on two key groups of employees at Ahold's Columbia-based U.S. Foodservice Inc. subsidiary, The Washington Post reports.
The company disclosed last week that accounting problems at U.S. Foodservice led to an overstatement of operating earnings in fiscal 2001 and 2002 by at least $500 million. In Thursday?s filing with the Securities and Exchange Commission, Ahold gave the first formal indication of possible problems with reports from 2000, the year Ahold purchased U.S. Foodservice.
Ahold's internal probe is focusing on whether rebates the company received upfront from vendors were properly booked, according to a source familiar with the company. The source said investigators are looking at the role of two sets of employees -- staffers who may have been directly involved in prepayment deals that led to the restatement, as well as top executives who should have known about the problems.
The source said those men include U.S. Foodservice's chief marketing officer, Mark P. Kaiser, and Tim Lee, a purchasing executive,both of whom have already been suspended, and CFO Michael Resnick.
The Wall Street Journal reported that U.S. Foodservice had ordered unusually large quantities of food and paper goods from manufacturers late last year, possibly to boost 2002 earnings. The goods reportedly were shipped to overflowing warehouses, according to the report.
A company spokeswoman said Ahold would not comment on the ongoing internal investigation, except to say the company is aware of the allegations.