Business - Allied Carpets gauges sales accounting damage
Allied Carpets this week attempted to gauge the extent of accounting irregularities in the company’s sales operations discovered by auditor Arthur Andersen, writes Phillip Inman.
A spokesman for Allied said an initial inquiry revealed the errors were thought to account for 3% of 1997/1998 annual sales, but the full extent would only be known after a wide-ranging investigation by Andersens.
Allied joined a long list of companies that have discovered sales staff booking orders as sales before transactions have occurred. Computer networking company Azlan, DIY retailer Wickes and engineering group Powerscreen have all lost millions of pounds from similar breaches of internal controls over the last year.
Andersen, which is under investigation by the Joint Disciplinary Scheme for its failure to spot the problems at Wickes, was understood to be confident Allied’s errors were spotted at an early stage. And in the last week, retailer Sears and US services company Cendant revealed sales-related frauds.