Myers Industries has released revised financial results for 4Q and the year as a result of completing its investigation into possible fraud at its Brazilian operations.

The revisions reflect adjustments that led to an increase in cost of sales of $2.4 million and an increase in selling, general and administrative expenses of $0.1 million for both the fourth quarter and full year of 2014. The total adjustments reduced income from continuing operations by $2.5 million, net income from continuing operations by $2.3 million and earnings per diluted share from continuing operations by $0.07 for both the fourth quarter and full year of 2014, the company said.

You can review the full amended financial report here.

The revision to the financial results is due to adjustments that were recorded as a result of an investigation into possible fraud at the company’s Brazilian operations, Myers said. The investigation determined that certain accounts were not properly reconciled and amounts were not substantiated by people responsible in the Brazilian location that knew or should have known they were not proper, Myers Industries said.

As a result of this investigation, management identified deficiencies in both the design and operating effectiveness of the company’s internal control over financial reporting, which lead to two material weaknesses in internal control over the inventory process at the Brazilian operations.
Myers Industries has taken preliminary steps to address the deficiencies at its Brazilian operations, it said. The company will provide training to implement and perform additional controls, as well as develop revised policies and procedures associated with the preparation and retention of supporting documentation for account reconciliations. Myers will also implement additional controls to enhance monitoring and oversight of the financial function at its Brazilian operations.