Accounting & Tax

ConAgra Settlement Continues Safeguards

The company agreed to keep in place a number of policies and practices designed to prevent future irregularities.
Stephen TaubJune 16, 2005

For the second time in two months, ConAgra Foods Inc. settled a lawsuit stemming from alleged accounting violations that led the company to restate three years of earnings, according to the Associated Press.

Under the agreement with Harbor Financial Partners, ConAgra agreed to keep in place a number of policies and practices designed to prevent future irregularities, the wire service pointed out.

In May 2001, ConAgra announced that it would restate its results downward for fiscal 1998, 1999, and 2000 due to accounting and conduct matters at its subsidiary United Agri Products Cos., which distributes seed, fertilizer, and agricultural chemicals. ConAgra sold United in 2003.

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Last month, ConAgra agreed to pay $14 million to settle a separate lawsuit by individual investors, who accused the company and several of its officers and directors of misrepresenting the company’s financials in order to inflate its stock price, according to the AP. The company did not admit wrongdoing in either settlement, the wire service added.

In this week’s settlement, according to the report, ConAgra agreed to maintain a “code of conduct” implemented in 2001 as well as a direct reporting relationship between senior financial officers at each of ConAgra’s nine operating companies and ConAgra’s controller. The AP also noted that ConAgra agreed to keep in place other procedures designed to enable accounting-department employees to report concerns to the audit committee.

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