IE 11 is not supported. For an optimal experience visit our site on another browser.

SEC launches an informal probe into CVS

Drug store chain CVS Corp. said on Tuesday the U.S. Securities and Exchange Commission has launched an informal probe into how the company accounted for a transaction in 2000.
/ Source: Reuters

Drug store chain CVS Corp. said on Tuesday the U.S. Securities and Exchange Commission has launched an informal probe into how the company accounted for a transaction in 2000.

In its annual report, CVS said an internal review of the matter completed this month had found that various aspects of its accounting for the transaction were incorrect. The company’s controller and treasurer resigned following the conclusion of the review.

David Rickard, the company’s chief financial officer, has taken over as its principal accounting officer on an interim basis.

The investigation did not result in any adjustments to the company’s financial statements, CVS said.

As part of the 2000 transaction, CVS said it made accounting entries conveying some excess plush toy inventory to a third party. The company also made a $12.5 million payment to that third party, and received $42.5 million in barter credits.

CVS, based in Woonsocket, Rhode Island, said it is responding to the SEC staff’s requests but does not expect the matter to have a material impact on its financial condition.