The Securities and Exchange Commission announced that Entergy (ETR) Corporation, a Louisiana-based utility company, agreed to pay a $12M civil penalty to settle charges that it failed to maintain internal accounting controls to ensure that its surplus materials and supplies were accurately recorded in its books and financial statements in accordance with generally accepted accounting principles. According to the SEC’s complaint, filed in the U.S. District Court for the District of Columbia, from at least mid-2018 to the present, Entergy included materials and supplies at their average cost as an asset on its balance sheets. However, during this time, Entergy had allegedly been informed by its employees and management consultants that this asset included a substantial amount of potential surplus, including aged materials and supplies in excess of Entergy’s anticipated future use or exceeding the maximum stocking levels deemed necessary by its business units. According to the complaint, Entergy failed to establish a comprehensive process to review these materials and supplies to identify surplus, remeasure it, and record any differences between its average cost and remeasured cost as an expense, in accordance with GAAP. “Internal accounting controls serve as a front-line defense in ensuring the accuracy and reliability of financial statements,” said Sanjay Wadhwa, Acting Director of the SEC’s Division of Enforcement. “Investors rely on public companies, such as Entergy, to ensure that adequate internal accounting controls are in place. We allege that Entergy failed to fulfill its obligation in this regard.” Without admitting or denying the allegations in the SEC’s complaint, Entergy consented to the entry of a final judgment, subject to court approval, which includes being permanently enjoined from violating Sections 13(b)(2)(A) and 13(b)(2)(B) of the Securities Exchange Act of 1934, paying the $12M civil penalty referenced above, and adopting an independent consultant’s recommended improvements to its internal accounting controls.
Pick the best stocks and maximize your portfolio:
- Discover top-rated stocks from highly ranked analysts with Analyst Top Stocks!
- Easily identify outperforming stocks and invest smarter with Top Smart Score Stocks
Published first on TheFly – the ultimate source for real-time, market-moving breaking financial news. Try Now>>
See today’s best-performing stocks on TipRanks >>
Read More on ETR:
- Entergy price target raised to $85 from $65 at Argus
- Entergy price target adjusted to $72 at Morgan Stanley after stock split
- Entergy price target raised to $165 from $144 at Scotiabank
- GE Vernova initiated, Merck upgraded: Wall Street’s top analyst calls
- Entergy downgraded to Sector Weight from Overweight at KeyBanc
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
