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Ted Baker Case - Coggle Diagram
Ted Baker Case
Who
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Management
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Used their knowledge and experience of the fashion industry in determining the level and rates of provisioning required to calculate the appropriate inventory carrying values.
Lindsay Page
Ted Baker's chief executive, left in December 2019 after last profit warning.
David Bernstein
Ted Baker's executive chairman, left in December 2019 after last profit warning.
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Deloitte
Audit firm that was responsible of uncovering that the stock inventory was overstated by £58 million.
KPMG
Audited the financial statement of period in question,who had previously said any misstatements were too small to affect the firm’s accounts.
Previously received a reprimand and a £3 million fine for a conflict of interest over its work with Ted Baker.
Ray Kelvin
Founder and former chief executive resigned in March 2019 after allegations of sexual harassment from staff.
How
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The directors have used their knowledge and experience of the fashion industry in determining the level and rates of provisioning required to calculate the appropriate inventory carrying values.
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Risk that the cost of inventory exceeds its net realisable value can occur because Sales in the fashion industry can be extremely volatile with consumer demand changing significantly based on current trends.
Adjustments are made where appropriate based on directors’ knowledge and experience to calculate the appropriate inventory carrying values.
What
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Ted Baker preliminary investigations suggested it had overestimated the value of stock it held on 26 January 2019 by £25 million.
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When
2019
Ted Baker issued four profit warnings and slumped to a first-half loss of £23 million in October, its first in more than two decades.
In December, Rachel Osborne, new CFO, uncovered stock inventory overstatement of £25 million.
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Where
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Assume that the fraud occur at Ted Baker's headquarters in London, England.