Tech Data wraps up accounting probe

Tech Data has concluded an investigation into accounting irregularities and set aside millions to cover potential VAT issues

Tech Data has concluded its investigation into its accounts and filed its annual report for the last fiscal year as it reveals that $27m is going to be wiped off previously reported net income.

As well as taking a hit on the income front the distributor has also had to put aside $55.6m to cover potential VAT charges resulting from the failure in the past of its Spanish subsidiary to deal with its taxes properly.

The channel player stated that those responsible for the accounting problems no longer worked at the firm and it had tightened up its procedures and informed all employees about the ethical values held by the firm.

"The Audit Committee, its independent counsel and forensic accountants performed a thorough investigation of the Company's accounting practices," said Charles Adair, chairman of the Tech Data Audit Committee.

"The board of directors is confident the company is addressing the problems that led to the restatement and has complete confidence in Tech Data's executive management team," he added.

The problems at Tech Data first emerged last Spring when the distributor revealed that due to accounting problems it would have to restate the previous three years accounts causing it to start an investigation and communicate its position with the Securities and Exchange Commission in the States.

The delays in filing its annual statement meant that the distributor had to delay its annual shareholder meeting and it is now requesting an extension to solicit proxies and hold its annual meeting.

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