SPRINGDALE, ARK. – According to a Dec. 21 filing made with the US Securities and Exchange Commission by Tyson Foods Inc., after an internal review, the company discovered that one of its cattle suppliers misrepresented the number of cattle it purchased on behalf of Tyson, resulting in it overstating its cattle inventory by approximately $285 million for the fiscal year ended Oct. 3, 2020. The supplier of cattle in question represented about 2% of Tyson’s total supply each year, from fiscal 2017 to 2020.
Tyson plans to amend its financial statement filed with the agency to accurately reflect its financial results for the fiscal years ended 2018, 2019 and 2020, in light of the findings. Tyson also expects the adjusted cattle inventory to impact its financial statements for the first quarter of fiscal 2021 as well as the year ended fiscal 2021. While the actual amounts are not yet known, Tyson officials said it may result in a financial gain in future earning periods as it seeks restitution for any losses to date.
According to the SEC filing, “The company’s management and its outside advisors re-evaluated the effectiveness of the company’s internal control over financial reporting and identified a material weakness in the company’s internal control over financial reporting (ICFR) relating to the physical existence of live cattle inventory. The company also initiated an investigation by outside advisors to review the facts and circumstances surrounding the misappropriation of company funds. That investigation has found no evidence that the company benefited from the supplier’s unlawful conduct or that anyone at the company took steps to alter financial statements to hide the transactions resulting from the supplier’s unlawful acts.”
The filing from the company said it is implementing measures to ensure accurate financial reporting of its live cattle inventory and plans to continue evaluating processes and controls to ensure the validity of its reported inventories.