Barnes & Noble (NYSE:BKS) is the latest retailer to come under watch by the U.S. Securities and Exchange Commission. The SEC told the bookseller it had begun an investigation into a restatement of company earnings announced on July 29 as well as an employee allegation that it improperly allocated some IT expenses.
The company said in an earnings report in July that it had restated results from the fiscal years ending in April 2011 and 2012 due to material mistakes in the financial reports for those periods. Barnes & Noble also added that it overstated certain accruals at its distribution centers.
"We are cooperating with the SEC, including responding to questions and requests for documents," company spokeswoman Mary Ellen Keating said in an email reports Reuters.
In addition to the financial errors, the SEC is also looking into a separate matter related to a former employee's allegation that Barnes & Noble mishandled allocation of certain information technology expenses between its Nook and retail segments for purposes of segment reporting. Barnes & Noble began filing its Nook business sales separately from its retail business in late 2012 in an effort to understand how the company could increase sales.
Just last week, J.C. Penney (NYSE:JCP) revealed that the SEC is investigating its liquidity, debt and other financial matters, including sales of company shares in September that the retailer is using to fund store improvements.
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