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Sarbanes-Oxley News & Developments
Coca-Cola Hires Firms To Probe Allegations of Marketing/Accounting FraudCoke has hired an outside auditor and law firm to investigate allegations made by former employee Matthew Whitley.
> > Allegations made in a lawsuit filed May 19 in Atlanta by Matthew Whitley. Until March 2003, Mr. Whitley, was finance director for supply management in the fountain division of Coke, which handles sales of fountain dispensed beverages to restaurants, movie theaters and other venues.
Mr. Whitley alleged in the suit, among other claims, that Coke overstated net revenue and gross profit by recording allowances to some customers as expenses rather than rebates from approximately 1998 to 2001. Mr. Whitley says he was wrongfully terminated in March after raising questions about the practices.
Before filing the lawsuit a letter was sent to Coke from Mr. Whitleys attorney, Marc N. Garber, which said a lawsuit would be filed if the company did not pay Mr. Whitley $44.4 million within one week. In the letter dated April 28, 2003 Mr. Garber said the $44.4 million represented about one-third of the financial exposure Coke would face if the lawsuit were pursued in court.
Under Cokes new policy, allegations regarding internal accounting or audit matters valued at $500,000 or more are automatically brought to the companys Audit Committee to determine a course of action. Coke managers recommended to the Audit Committee that an independent investigation be conducted and the Audit Committee agreed.
Source: The Wall Street Journal article dated May 21, 2003
Published:2003-05-21
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