Cake Box shares recovering after plummeting when blogger found accounts errors
Sweet-treat maker Cake Box lost almost a fifth of its market value after errors in its annual report were spotted by a blogger.
In a post over the weekend, blogger Maynard Paton identified mistakes in the company’s 2021 annual report.
Its share price slipped 18 per cent, to 267p yesterday. However, on Tuesday morning its shares had recovered 11 per cent to 284.00p.
In a report by the Telegraph, Cake Box admitted there had been some “transcription errors” and “inconsistencies in prior period inventory reporting”.
It said it had hired BDO advisors in a bid to improve its “internal audit practices”.
Errors included a “phantom £2m” entry into the cashflow statement, varying tax amounts and a number of restated sales numbers.
The blogger also noted a website hack in March 2020 had only been reported in June 2021.
The post included a resignation letter from RSM, the company’s previous auditor, outlining the firm’s former auditor’s concerns “about the robustness of the company’s control and governance frameworks”.