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Finance

What Happened With the Krispy Kreme Accounting Scandal?

The Krispy Kreme accounting scandal is a prime example of a public company using shareholder funds to propel an increasingly dramatized bottom line. Former CEO Scott A. Livengood started altering accounting reports in the 1990s and continued the practice into the new millennia, even after the company went public for the first time in 2000.

While they weren’t accused of outright fraud, Livengood and his cohorts were independently profiting off of the company’s accounting. Once the company went public, they manipulated the EPS by setting target prices with analysts and beating them by a cent in the earnings report. This leads to increased interest in the stock and was a key reason why Krispy Kreme stock (formerly “KKD”) ballooned early on. Executives received monetary bonuses for a successful attempt.

Also, the SEC requires certain documentation to remain a public company. Krispy Kreme’s filings hid the fact that Livengood exceeded his personal flight budget by $320,000 in one year, among other misdeeds.

View more information: https://marketrealist.com/p/krispy-kreme-accounting-scandal/

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