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Methode Electronics Scrutinizes Validity of Certain Revenue
Manufacturer’s pricing data for certain contracts is suspect.
June 28, 2023
Methode Electronics (MEI), an electronic device manufacturer, lacks effective controls aimed at ensuring the pricing data for certain customer contracts is accurate. The material weakness in the company’s control environment is related to revenue at a business unit in its automotive segment:
“Specifically, we did not maintain effective review, approval and validation controls over pricing data entered into the business unit's financial system and non-standard contract terms.”
Though Methode Electronics reassured investors the control deficiencies did not result in a material misstatement for the year ended April 29, 2023, the company acknowledges the deficiencies could have.
Notably missing from the disclosure is which business unit lacked the appropriate controls and how much of the company’s sales are derived from non-standard contracts.
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