Home / Knowledge / News / Apparel/Garments / Carter's provides update on customer accommodations review
Carter's provides update on customer accommodations review
Dec '09
Carter's, Inc. announced the substantial completion of an independent investigation undertaken at the direction of the Company's Audit Committee concerning the reporting of wholesale customer accommodations in incorrect periods and the resulting adjustments to the Company's financial statements for the periods covered by the previously announced restatement.

The Audit Committee conducted its investigation with the assistance of outside counsel and forensic accountants engaged by outside counsel, and has concluded that the Company reported various customer accommodations in incorrect fiscal periods. The investigation uncovered irregularities involving members of the sales organization intentionally not disclosing accommodations arrangements with customers to the Company's finance organization and intentionally providing inaccurate documentation and explanations regarding accommodations to the finance organization. Consequently, such arrangements were not communicated to the Company's independent registered public accounting firm.

These accommodations arrangements were made throughout the restated periods by certain members of the Company's sales organization and involved the deferral of accommodations into later fiscal periods. The deferrals resulted in the overstatement of net sales and net income in certain of the restated periods and the understatement of net sales and net income in certain of the restated periods. The deferrals related primarily to a single wholesale customer and, to a lesser extent, other wholesale customers.

The cumulative, after-tax impact of the adjustments required to the financial statements for the five fiscal years of 2004 through 2008 and the first six months of fiscal 2009 is a 3% reduction in retained earnings in the amount of $7.5 million. This amount reflects the sum of adjustments to net income for fiscal 2004 through the six-month period ended July 4, 2009, which total $4.4 million, and a 2003 cumulative adjustment to retained earnings in the amount of $3.1 million. The adjustments do not impact the Company's reported cash flow from operations for any of the periods presented. The adjustments to the Company's statements of operations and balance sheets for the restated periods are set forth at the end of this release.

Through the investigation, management identified control deficiencies in its internal controls associated with customer accommodations processes that constitute material weaknesses and determined to restate prior period financial statements. Management has been actively engaged in developing remediation efforts to address these control deficiencies. These efforts include the separation of certain employees from the Company. Additional information regarding the control deficiencies and remediation efforts is set forth in the Company's Form 8-K filed today.

“The Board of Directors is pleased that the Audit Committee's investigation of accommodations is substantially complete. We are thankful to our management team for their responsiveness to the challenging issues presented by the investigation,” said Thomas E. Whiddon, Lead Director, speaking on behalf of the Company's Board of Directors.

Must ReadView All

Textiles | On 25th Jul 2017

Global growth to pick up in 2017 and 2018: IMF

The pickup in global growth anticipated in the April World Economic...

Textiles | On 25th Jul 2017

Egypt signs agreement with UNIDO for cotton production

Egypt has signed a €1.5 million ($1.74 million) cooperation agreement ...

Textiles | On 25th Jul 2017

Pakistan’s textile exports stay stable in FY17

The value of textile and garment exports made by Pakistan increased...

Interviews View All

Indian fashion industry

Cotton consumption will keep growing in the Indian fashion industry

Cindy McNaull

We have broad range of options in durable fabrics

Sanjay Desai & Ashish Mulani
True Colors

Digital textile printing will be the technology of the future

Kerem Durdag
Biovation II LLC

Kerem Durdag, CEO, Biovation II LLC, provides an insight into future...

Suresh Patel
Sidwin Fabric

Sidwin Fabric is a manufacturer and exporter of polypropylene textiles and ...

Steve Cole
Xerium Technologies

Steve Cole of Xerium Technologies discusses the industry. Xerium is the...

Robert Brunner

Golfwear and menswear brand Devereux is set for greener pastures. Robert...

Wendell Rodricks
Wendell Rodricks

"We should not compare India and the West. There are things we do that...

Karan Arora
Karan Arora

Bridal couture created with rich Indian heritage, exquisite craftsmanship...

Press Release

Press Release

Letter to Editor

Letter to Editor

RSS Feed

RSS Feed

Submit your press release on


Letter To Editor

(Max. 8000 char.)

Search Companies


July 2017

Subscribe today and get the latest update on Textiles, Fashion, Apparel and so on.

news category

Related Categories:

Planning to Take the Leap towards

Do you see sustainability as a route to business growth?

Yes No

Do you think the sustainability space has the needed tools and resources available for a business to lead change?

Yes No

Do you think adopting a sustainable approach will be a profitable move for your business?

Yes No

Do you want the world to know about your sustainability journey and your business’ environmental footprint?

Yes No

Thanks for your valuable feedback. Claim your free latest sustainability e-book.

E-News Insight
Subscribe Today and Get the
Latest News Update in Your Mail Box.
Advanced Search