In a March 16 press release, Tupperware Brands said, “for fiscal years 2020 to 2022, in the aggregate, the company believes that adjusted income from continuing operations was previously understated and will likely be restated higher.”
In a March 12 regulatory filing, Tupperware Brands had disclosed several of its financial statements “were materially misstated and, therefore, the financial statements should be restated, and the financial statements and earnings press releases should no longer be relied upon.” This finding was based on management’s recommendation and following consultation with PwC, the company’s independent registered public accounting firm, the company said.
While preparing the consolidated financial statements for the year ended Dec. 31, 2022, Tupperware Brands said it “identified multiple prior relevant period misstatements, the most material of which identified to date relate to the company’s accounting for income taxes and leases.” The company added, the “newly identified” misstatements are in addition to “other prior relevant period misstatements previously identified by the company” dating back to 2020.
In its Form 8-K, Tupperware Brands said it expects that misstatements that originated prior to 2020 resulted in the 2020 beginning retained earnings balance being overstated by approximately $23 million to $28 million, “with such reduction primarily resulting from misstatements related to income taxes.”
“As the company continues its work to finalize its financial close process, these preliminary results may change.” Tupperware Brands said it will correct for such misstatements by restating its 2021 and 2020 consolidated financial statements with the filing of its 2022 Annual Report on Form 10-K.
“While the delayed filing of our Form 10-K is disappointing, we believe it is important to ensure continued improvement in all aspects of our operations, including financial reporting,” said Tupperware Brands CEO Miguel Fernandez.
“We have applied lower materiality thresholds and are reviewing our worldwide accounting for income taxes and leases,” said Tupperware Brands CFO Mariela Matute. “We continue to work diligently to finalize our year-end financial close process and immediately start remediation of the identified material weaknesses,” she added.
Internal Control Failures
Tupperware Brands further determined that material weaknesses exist in its internal control over financial reporting (ICFR) as of Dec. 31, 2022. “The company did not design and maintain effective controls in response to the risks of material misstatement.”
Specifically, Tupperware Brands said, “changes to existing controls or the implementation of new controls were not sufficient to respond to changes to the risks of material misstatement in financial reporting,” and that this contributed to material weaknesses related to the “accounting for the completeness, accuracy and presentation of income taxes; and “right of use assets and lease liabilities.”
“There can be no assurance that additional material weaknesses will not be identified as the company completes its financial close process,” Tupperware Brands stated in its Form 8-K. 
Jaclyn Jaeger is a contributing editor at Compliance Chief 360° and a freelance business writer based in Manchester, New Hampshire.