Atlanta (July 14, 2003) -- Coca-Cola Co. said Friday that its accounting practices are under federal investigation.
In a short statement Friday, the company announced its cooperation with the U.S. Attorney's Office, stemming from a $44.4 million whistleblower lawsuit filed by former employee Matthew Whitley in May.
The federal probe follows news last month that the Securities and Exchange Commission had launched an inquiry into accounting impropriey allegations made by Whitley in the lawsuit.
Whitley told the company's board that a 1998 frozen Coke promotion at Burger King was based on rigged studies, and also that the company was coercing bottlers and distributors to accept last minute syrup shipments at the end of the fiscal first quarter. This practice, described as "channel stuffing," has been used by companies to boost reported revenues at the end of a quarter.
Last month, Coke said it would take $9 million in charges related to accounting irregularities related to the frozen Coke promotion.
-- WebCPA staff
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