Archer Daniels provides update on internal investigation, identifies weakness

Archer Daniels provided an update with respect to the internal investigation led by the audit committee of its board of directors regarding certain accounting practices and procedures with respect to ADM‘s Nutrition reporting segment, including as related to certain intersegment sales. The investigation was initially disclosed in January. The company has historically disclosed in the footnotes to its financial statements that intersegment sales have been recorded at amounts approximating market. In connection with the investigation, the company identified and corrected certain intersegment sales that occurred between the company’s Nutrition reporting segment and the company’s Ag Services and Oilseeds and Carbohydrate Solutions reporting segments that were not recorded at amounts approximating market. Because intersegment sales occur between the company’s reporting segments, the adjustments have no impact on the company’s consolidated balance sheets and statements of earnings, comprehensive income (loss), or cash flows. In addition, the company determined that the adjustments are not material to the company’s consolidated financial statements taken as a whole for any period. In connection with the internal investigation, the company identified a material weakness in its internal control over financial reporting related to its accounting practices and procedures for intersegment sales. ADM remains committed to internal controls and has developed a remediation plan to enhance the reliability of its financial statements with respect to the pricing and reporting of such sales. ADM continues to cooperate with the Securities and Exchange Commission and the Department of Justice in this matter. “Our strong commitment to compliance and integrity in our financial reporting is evidenced by the diligence and breadth with which the Audit Committee has conducted its internal investigation. The adjustments related to the Company’s reporting segments do not impact our consolidated statement of earnings. Looking ahead, we have developed a remediation plan with respect to the identified material weakness to enhance the reliability of our financial statements with respect to the pricing and reporting of such sales,” said chairman and CEO Juan Luciano. “We remain committed to strong internal controls. We look to continue our focus on execution and remain steadfast in delivering on our purpose of unlocking the power of nature to enrich the quality of life.”