Jeans maker Levi Strauss & Co. (LS&CO), USA, has revealed errors in its tax returns for 1998 and 1999 resulting in almost $31 million being wiped off previously reported earnings. The San Francisco-based business says that in 1998 and 1999 it mistakenly took the same tax deduction twice for losses related to various manufacturing plant closures. The mistakes are expected to cost the company around $3 M.

in future taxes and force a restatement of previous earnings. The first casualty of this tax mess is the company's recently released third-quarter 2003 results. These will be reduced by around $4. 9 M.

to $21. 8 M. In addition, whilst the errors did not affect results for fiscal years 1998 through 2000, they will slice $26 M. off net income for 2001 and increase that year's tax liabilities by $26 M. Outside auditors are expected to reaudit the company's 2001 financial statements. LS&CO says that its audit committee will also be looking into the situation.

Levi's audit committee has been busy of late. Last month, following an enquiry into allegations made by two former employees, it reported that it had not discovered evidence of tax fraud. It did say, however, that the company's use of various tax reserves in the period 1994 to 2001 was not supported by sufficient contemporaneous documentation. that year's tax liabilities by $26 M. Outside auditors are expected to reaudit the company's 2001 financial statements. LS&CO says that its audit committee will also be looking into the situation.

Levi's audit committee has been busy of late. Last month, following an enquiry into allegations made by two former employees, it reported that it had not discovered evidence of tax fraud. It did say, however, that the company's use of various tax reserves in the period 1994 to 2001 was not supported by sufficient contemporaneous documentation.