ABSTRACT
On March 30, 1994, Woolworth Corporation, the eighth largest retailer in the United States, announced that it had launched an internal investigation of “allegations of accounting irregularities.” A whistle-blower, John H. Cannon, the company’s treasurer, reported to John W. Adams, an outside director, about possible wrongdoing in at least three of the company’s late quarterly reports. It was said that Brian Flood, then controller of Woolworth’s operation in Canada, was told to report monthly financial performances that did not closely resemble the accounting records. Selig Adler, then chief financial officer (CFO) of Kinney, one of Woolworth’s shoe stores, said that he was told by CFO Charles T. Young to report rosier figures than the realities when submitting the second and the third quarters of the 1993 fiscal year report.1
