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AIA

FRC investigates Computer 2000 accounts

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22nd May 2014
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The Financial Reporting Council (FRC) has started an investigation into the preparation and approval of the financial information of Computer 2000 Distribution (C2000).

The investigation relates to the years ended 31 January 2009 to 31 January 2013.

The decision to investigate follows an announcement on 5 February by C2000’s US parent company, Tech Data Corporation - one of the world’s largest wholesale distributors of technology products and services - after Tech Data investigated its accounting practices across Europe.

After restating its consolidated financial statement and other financial information relating to those years, Tech Data conducted an internal investigation into the deficiencies of its controls over financial reporting. The restatement reduced previously reported profits by $27m over the three years.

The restatement reflects adjustments identified by an audit committee investigation that found an inadequate control environment in the UK and European subsidiaries. These adjustments corrected errors arising from "improper vendor accounting, improper use of manual journal entries, and improper recognition of foreign currency exchange transactions".

EY was the parent company's auditor at the time.

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