Financial Statement Restatement Paper:
Green Mountain Coffee Roasters
Roslyn E. Updegraff
November 18, 2013
Financial Statement Restatement Paper: Green Mountain Coffee Roasters
Green Mountain Coffee Roasters is a Vermont headquartered marketer of special coffees. They have a stellar reputation; Forbes named them as one of the “200 Best small Companies in America” and one of the “100 Best Corporate Citizens” (Faille, 2013). Unfortunately for Green Mountain Coffee Roasters, errors happen. There error is causing scrutiny of the Securities and Exchange Commission (SEC) and numerous class action lawsuits alleging securities fraud (Antar, 2011). When an accounting error is made, the significance it has on past, present, and future financial reports must be assessed. If it only effects current and future reports, it is fairly insignificant and therefore must be reported, but the financial reports do not need to be redone. On September 28, 2010, Green Mountain Coffee Roasters told its investors that they were under inquiry and they had made an error in accounting that was not significant enough to need to go back and fix past financial statements, but would be adjusted in the end of year reports (Antar, 2011). This information caused a drastic stock price decline. Bringing stock from $37.01 a share to $26.87 (Faille, 2013).
Unfortunately for the Company this was only the beginning of their troubles. On November 19, 2010, Green Mountain informed investors of three new errors which made the total overstatement, $10.1 million in pre-tax income (Antar, 2011). This time they said it was not as minor, and although Green Mountain did not say this error was significant, they did state they would restate their financial reports (Antar, 2011). On December 9, 2010, Green Mountain Coffee reported more details about its accounting errors and how they really effected previous periods. This information showed that they actually...