Auditing

Lancer, Supplier to Coca-Cola, Loses Auditor

KPMG will also withdraw its audit opinions for 2000 through 2002.
Stephen TaubFebruary 5, 2004

Lancer Corp., a provider of soda fountain equipment, announced on Tuesday that its independent auditor, KPMG LLC, had resigned.

Only last week Lancer, which along with the Coca-Cola Co. is being investigated by the SEC and the Justice Department, announced that an independent investigation had not found enough evidence that its management team had engaged in any intentional misconduct in connection with allegations of corporate wrongdoing raised by Coke whistle-blower Matthew Whitley.

In a letter delivered to Lancer late Monday night and reported by Lancer late Tuesday, KPMG said it determined that Lancer’s audit committee “has been adequately informed with respect to likely illegal acts which have come to the attention of KPMG” and that these acts “will have a material effect on the financial statements of the company.”

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KPMG added that it resigned as auditor because “Lancer has not taken timely and appropriate remedial actions with respect to the illegal acts.” KPMG’s letter, Lancer noted, did not specifically identify any of these acts.

In addition, KPMG has orally informed Lancer’s audit committee that it intends to withdraw its audit opinions for the three years from 2000 through 2002.