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Frances Ball 7 May 2019 02:27pm

Kraft Heinz reveals $180m accounting error

Kraft Heinz, which is audited by PwC, has now been forced to restate three years of its financial results

A subpoena from the Securities and Exchange Commission (SEC) resulted in Kraft Heinz launching an internal probe earlier this year.

On Monday, Kraft Heinz announced that the investigation had found evidence of misconduct in procurement operations.

The company said that although the discrepancies it uncovered weren’t “quantitatively material”, previously issued financial accounts for 2016, 2017 and three quarters of 2018 would need to be adjusted for error.

The adjustments amount to more than $180m (£137.5m), Kraft Heinz said. The company said it discussed this assessment with PwC.

Misstatements in the reports mainly relate to the timing and recognition of supplier contracts.

Warren Buffet, who has a $10.6bn (£8.1bn) stake in Kraft Heinz through Berkshire Hathaway, told CNBC that “the company has my confidence”.

Berkshire Hathaway had been forced to publish incomplete reports for its firs-quarter earnings, because Kraft Heinz had delayed its own earnings filings.

Kraft Heinz said that the probe hadn’t found any evidence of misconduct among the senior management team.

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