Ace Hardware has painfully realized the importance of employee training. A mid-level employee in the finance department caused a $152 million accounting discrepancy between the GL and actual inventory. Journal entires were made that made it look like the ledgers were reconciled when they were not. Ace Hardware will restate earnings for fiscal years 2004-2006 and correct numbers for fiscal year 2007.
The employee did nothing fraudulent, and no inventory or money is missing, [CEO Ray] Griffith said.
The person was not properly trained or equipped to do the job, and Griffith conceded that that was Ace Hardware’s fault.
“We are embarrassed by it,” Griffith said. “We did not provide the
training, oversight or checks and balances to help that person do [his
or her] job,” Griffith said. “[The employee’s] only intent was to try
to do the best job for the boss and for our company.”
Revisiting employee training material and programs on a regular basis not only helps companies and employees adapt more effectively to process and organizational change, it helps to ensure that day-to-day responsibilities are conducted competently.
Read more:
- Chicago Sun-Times
- CFO.com
- Ace Hardware (Sept 5, 2007 Press Release)
