Deloitte and Freshfields Bruckhaus Deringer to Probe Accounting Error

  • Ted Baker appoints Deloitte to investigate £25m stock overstatement
  • Deloitte and law firm Freshfields Bruckhaus Deringer to conduct the inquiry
  • Inventory value overstated by £20m to £25m
  • No cash impact, adjustment relates to prior years
  • AlixPartners conducting separate review of operations
  • Consulting firm Korn Ferry recruiting new chairman

Ted Baker has appointed accounting firm Deloitte, a ‘Big Four’ auditor, to investigate an accounting error that overstated the value of its stock by up to £25m. The company will also work with law firm Freshfields Bruckhaus Deringer on the inquiry. According to Sky News, Ted Baker’s board estimated the inventory value was overstated by £20m to £25m in a preliminary analysis. Any adjustment would have no cash impact and relate to prior years. Separately, consultancy firm AlixPartners is conducting a review of its operations. Korn Ferry has been appointed to recruit a new chairman to succeed David Bernstein, who took on executive responsibilities after founder Ray Kelvin stepped down due to accusations of inappropriate behavior and sexual harassment claims.

Factuality Level: 8
Factuality Justification: The article provides accurate information about Ted Baker appointing Deloitte and Freshfields Bruckhaus Deringer to investigate an accounting error, the estimated value of the overstatement, and the appointment of a new chairman. It also mentions the involvement of AlixPartners in a separate review of operations. The article is not sensational or opinionated, and does not contain any logical errors or inconsistencies.
Noise Level: 3
Noise Justification: The article provides relevant information about Ted Baker’s accounting error and the companies hired to investigate it, as well as the appointment of a new chairman. It also mentions the reason behind the need for a new chairman (allegations against the previous one). However, it could provide more details on the specific findings or implications of the overstated inventory value and the impact on the company’s operations.
Financial Relevance: Yes
Financial Markets Impacted: Ted Baker’s stock value and accounting practices
Financial Rating Justification: The article discusses an accounting error that overstated the value of Ted Baker’s inventory by up to £25m, which impacts the company’s financial situation and could potentially affect its stock value. It also mentions the appointment of consultancy firm AlixPartners for a review of operations and the recruitment of a new chairman, both of which have implications on the company’s financial performance.
Presence Of Extreme Event: No
Nature Of Extreme Event: No
Impact Rating Of The Extreme Event: No
Extreme Rating Justification: There is no extreme event mentioned in the text.

Reported publicly: www.retailsector.co.uk