Thursday, January 12, 2006

Home Depot Subject of SEC Informal Investigation

The Home Depot Inc. disclosed that it is the subject of an SEC informal investigation into its accounting for vendor rebates on returned goods.  The probe concerns refunds paid by suppliers for goods damaged in shipping, an area in which a retailer can inflate its returns to increase revenue and income.  Home Depot issued a statement stating "Recent media assertions regarding the Home Depot's (return-to-vendor) policies are simply not true."  Accounting for rebates has been the subject of other SEC investigations of companies, including, among others, GM and Delphi.  A Reuters story (here) discusses the reports of the investigation. (ph)

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