Ace Hardware said it has discovered an error in its historical financial statements that showed a $154 million difference between the company's 2006 general ledger balance and its actual inventory records.
Ace said the final amount of the disparity might turn out to be less, but it probably would result in a restatement of the hardware store chain's financial results. The error accumulated over at least five years.
Ace has engaged Protiviti, a consulting firm that specializes in inventory reconciliation, to help identify the cause and extent of the problem. The company said a full assessment of the accounting error could take several months to complete.
Ace CEO Ray Griffith said he did not believe the problem was due to theft or missing inventory. Ace is not a publicly traded company, but Griffith and chairman J. Thomas Glenn said they were still committed to rooting out the cause of the accounting shortfall and fixing it.
Last month, Ace talked with its retailers about converting from a cooperative to a traditional corporation in the future, but the company has decided not to pursue the change until it gets the accounting problem resolved.
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