SEC-PR-2412-206

According to the SEC’s complaint, filed in the U.S. District Court for the District of Columbia, from at least mid-2018 to the present, Entergy included materials and supplies at their average cost as an asset on its balance sheets. However, during this time, Entergy had allegedly been informed by its employees and management consultants that this asset included a substantial amount of potential surplus, including aged materials and supplies in excess of Entergy’s anticipated future use or exceeding the maximum stocking levels deemed necessary by its business units. According to the complaint, Entergy failed to establish a comprehensive process to review these materials and supplies to identify surplus, remeasure it, and record any differences between its average cost and remeasured cost as an expense, in accordance with GAAP.

“Internal accounting controls serve as a front-line defense in ensuring the accuracy and reliability of financial statements,” said Sanjay Wadhwa, Acting Director of the SEC’s Division of Enforcement. “Investors rely on public companies, such as Entergy, to ensure that adequate internal accounting controls are in place. We allege that Entergy failed to fulfill its obligation in this regard.”