Accounting probe launched

Friday, Jan. 25, 2002 | 10:31 a.m.

TROY, Mich. -- Kmart Corp., the discount chain that filed for bankruptcy protection Tuesday, is investigating an anonymous letter sent to its board and the U.S. Securities and Exchange Commission about unspecified accounting matters.

The letter, purported to come from Kmart employees and also sent to its auditors, has been referred to the board's audit committee, Kmart said. Kmart also said it contacted the SEC, which has authorized an investigation.

Accounting failures like that at Enron Corp. have eroded investor confidence and led several government leaders to call for tighter regulations of the accounting industry. With retailers, accounting issues sometimes center on the way a company reports the leases for its stores or the way it writes down the value of inventory, analysts said.

Kmart shares fell 9 cents to 84 this morning.

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