Case
Macy's hidden delivery expenses
On 25 November 2024 Macy's said an independent investigation found that one employee responsible for small-package delivery expense accounting made erroneous accrual entries to hide about $132–154 million of delivery expenses, and delayed its third-quarter results (press release). Its 8-K of 11 December 2024 put the figure at about $151 million from Q4 2021 to Q3 2024, with falsified documents, and reported a material weakness: control design that ignored the risk of employee circumvention (Form 8-K).
- Industry
- Department-store retail (USA)
Frameworks applied
This case is read through the frameworks below.
- COSO internal control frameworkAs the business grows or prepares to raise capital, which components must the CFO and board build into internal control so that figures and operations can be trusted?
- Preventive, detective and corrective controlsAfter an error or fraud exposes a weak process, which mix of preventive, detective and corrective controls should a finance manager put at each step?
Sources
References
Listed A–Z by author surname, Harvard style. A source with a DOI links to https://doi.org/…; one without links to its page or says plainly that it has no DOI.
- Macy's, Inc. (2024) Form 8-K, current report, 11 December 2024. Washington, DC: U.S. Securities and Exchange Commission.No DOIsec.govCited in 1 article
- Macy's, Inc. (2024) Macy's First 50 locations achieve third consecutive quarter of positive comparable sales; Company delays third quarter 2024 earnings release and conference call. Press release, 25 November 2024.No DOIsec.govCited in 1 article
- Wile, R., Kopack, S. and Repko, M. (2024) Macy's confirms rogue employee hid $151 million in expenses over three years. News article.No DOInbcnews.comCited in 1 article