UniFirst Reveals Control Deficiency Related to Revenue & Receivables
Uniform company also discloses Mexican tax bill the equivalent of 81.9% of FY22 net income.
November 15, 2022
UniFirst Corporation (UNF), a provider of workplace uniforms and protective work wear, identified a material weakness in its internal control over financial reporting (ICFR) related to its revenue and accounts receivable process. The company blamed ineffective information technology controls related to the implementation of a new $30 million dollar customer relationship management (CRM) system.
Though UniFirst’s management reassured investors it spend extra time inspecting revenue and receivables balances— and suggests the company’s financials are accurate in its latest annual report— it did offer this caveat:
“Our business process controls within the revenue and accounts receivable process, both automated and manual, that are dependent on the completeness and accuracy of the information derived from the affected IT system were also deemed ineffective because they could have been adversely impacted.”
Enerpac’s IT upgrade is only going to get more complicated. In addition to the CRM, the company is deploying a new enterprise resource planning (ERP) system, which have been associated with internal controls issues and cost overruns at other firms we track.
Separately, Enerpac also disclosed it now owes Mexico $84.7 million in back taxes and penalties related to the improper calculation of certain taxes in 2016. Though Enerpac is appealing, it does not appear the company has recorded a reserve.
The tax bill is the equivalent of 81.9% of the company’s FY22 net income.
Related: CTAS, ARMK
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