Macy’s has announced a delay in its third-quarter 2024 financial results due to an accounting issue involving an employee who allegedly hid up to $154 million in delivery fees.
The retailer released preliminary sales figures, which indicate a 2.4% decline in net sales to $4.74 billion.
The company disclosed that a single employee “intentionally” entered incorrect accounting data to conceal delivery costs estimated at between $132 million and $154 million between the fourth quarter of 2021 and the third quarter of 2024.
During this period, Macy’s recorded approximately $4.36 billion in delivery costs.
Macy’s has stated that the employee in question is no longer affiliated with the company.
Originally due to report results on November 26, Macy’s now expects to release full third-quarter financial results by December 11, 2024.
An independent investigation found there was no evidence other employees were involved and no indication the matter had an impact on cash management or payments to suppliers, the company said.
Commenting on the errors at Macy’s, Stefan van Duyvendijk of US accounting software company FloQast said: “ERPs (Enterprise Resource Planning) and most reporting software are not designed to detect incorrect accounting, let alone deliberately fraudulent accounting.
“While they do have some important controls in place, these are limited. That’s why account teams spend so much time in the month-end closing process identifying and correcting these errors. This could have been avoided if proper assessment and controls had taken place. Both are traditionally difficult to achieve.
“However, combining workflow automation with compliance software would have made it difficult to miss this mistake. Workflow automation would have made it much easier to set up the right assessment procedures and run them with easy insights by the assessors.”
“Macy’s Delays Third-Quarter 2024 Earnings After Employee Hid $154 Million in Delivery Charges” was originally created and published by International Accounting Bulletin, a brand owned by GlobalData.
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