With the Enron implosion still very fresh in the minds of American business, Kmart, which filed for bankruptcy last week, announced that it was beginning an investigation of its internal accounting practices. The investigation was triggered by an "anonymous letter," reportedly by company employees, expressing concern regarding unspecified accounting matters. The letter was sent to Kmart directors, auditors and government regulators, according to a Kmart press release.
The contents of the letter, a copy of which was sent to the SEC by the anonymous party, have not been disclosed. Kmart indicates that it will cooperate fully with an investigation.
"The responsible action by any company is to conduct an investigation and let people know that we're cooperating fully with the SEC investigation," said Jack Ferry, a Kmart spokesman.
PricewaterhouseCoopers had been the auditors for Kmart, a $37 billion retailer. The Board of Kmart has retained Deloitte & Touche to carry out an independent investigation.