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The Daily

Target Managers Caught Massaging Earnings Data

By:
Chris Gaetano
Published Date:
Apr 11, 2016
InflationA team of 10 managers for retail chain Target have been caught manipulating earnings, leading to three designations and several more facing disciplinary action, according to The Guardian. Target's parent company, Wesfarmers, reported earnings of $74 million. However, an internal investigation revealed that number should have been $53 million. It was discovered that the Target managers artificially inflated earnings numbers by securing debates from 31 overseas suppliers for the first half of the 2016 fiscal year, saying that the retailer would pay them higher prices in the second half, according to The Guardian. These rebates, plus $3 million worth of other deals that did not comply with internal accounting policy, allowed Target to report $21 million in extra earnings. Wesfarmers representatives said that the managers were trying to make up for an earnings shortfall, which caused them to make a move that the company characterized as "mind-blowingly stupid." The firm is currently working to unwind the arrangement.