McCormick & Co., the big Baltimore spice maker, admitted yesterday that it used fictitious records and other improper accounting practices to inflate its sales and profits over a four-year period.

McCormick announced that David B. Michels, head of its grocery products division, had resigned from the board of directors because of his involvement in the scheme, which created more than $46 million in phony sales and $4 million in nonexistent profits.

But a spokesman said no action is expected to be taken against other top McCormick executives, including President Hillsman V. Wilson and the company's secretary, treasurer and controller, all of whom knew of the accounting irregularities, according to an investigation by the Washington law firm of Morgan, Lewis & Bockius.

The law firm was hired as special counsel to conduct an independent investigation after internal audits disclosed widespread accounting improprieties in McCormick's grocery products division. A year ago McCormick restated its financial results for the years 1977 through 1980, reducing reported profits by more than $4 million and cutting sales by $46 million.

Yesterday, the company made public its report to the Securities and Exchange Commission summarizing the results of the special counsel's investigation, which found accounting improprieties not only in the grocery products division but also at the corporate level.

McCormick said yesterday it has taken action "not only to correct the situations . . . but also to make sure they will not occur again." On the advice of the special counsel, McCormick plans for the first time to appoint outsiders to its board of directors and put them on its audit committee.

The SEC is continuing to investigate McCormick, reportedly looking into violations of financial disclosure laws. Reporting violations are usually settled by the SEC without disciplinary action against the company.

McCormick's report to the SEC blamed the phony accounting on overzealous employes who were struggling to meet the company's sales and profit goals. The report said the employes "apparently believed that the practices were the only means available to achieve profit objectives which they considered to have been unrealistically imposed."

In addition to the profit pressure, "there was a team spirit at GPD grocery products division which led persons to participate in practices which they knew to be wrong," the company said.

McCormick's report to the SEC disclosed that the grocery division overstated its sales and understated its expenses through widespread accounting improprieties.

The grocery division routinely included in its quarterly sales goods that had been pulled off the shelves of the warehouse, but not yet shipped, contrary to normal practice. Such goods amounted to about $1 million a year in 1977, 1978 and 1979, but the amount jumped to $3.6 million in 1980, the investigation found.

To inflate sales further, warehouse employes worked past midnight on the last day of the fiscal period, spending another five or six hours piling up goods that were counted as sold but not yet shipped, McCormick disclosed.

Truckers were persuaded to pick up goods at the warehouse and hold them for later delivery, putting more merchandise into the pipeline so it could be counted as sold. "In other instances, dates on shipping documents were reportedly altered to reflect sales in an earlier period."

The grocery division frequently deferred paying rebates and advertising allowances due to customers, shifting the expenses from one quarter to the next, the special counsel found. "This practice was used on an ad hoc basis until 1979, when it became a part of a regular plan."

The company also manipulated its corporate records of inventories of black pepper to minimize the amount of pepper shown on the books, the investigators found.

McCormick President Wilson "informed special counsel that he knew about" the pepper practices but "he believed that there was nothing improper," the report said. "Special counsel concluded that this belief was honestly held although erroneous."

The attorneys said Wilson, Treasurer Donald W. Dick Jr., and controller Richard I. Pulse "had sufficient information to require further inquiry into the accounting practices" of the grocery division.

Wilson and corporate secretary James Harrison "had knowledge of the fictitious nature" of some accounting forms and "should have known" that the false forms were being used for accounting improprieties. records of inventories of black pepper to minimize the amount of pepper shown on the books, the investigators found.

McCormick President Wilson "informed special counsel that he knew about" the pepper practices but "he believed that there was nothing improper," the report said. "Special counsel concluded that this belief was honestly held although erroneous."

The attorneys said Wilson, Treasurer Donald W. Dick Jr., and controller Richard I. Pulse "had sufficient information to require further inquiry into the accounting practices" of the grocery division.

Wilson and corporate secretary James Harrison "had knowledge of the fictitious nature" of some accounting forms and "should have known" that the false forms were being used for accounting improprieties. records of inventories of black pepper to minimize the amount of pepper shown on the books, the investigators found.

McCormick President Wilson "informed special counsel that he knew about" the pepper practices but "he believed that there was nothing improper," the report said. "Special counsel concluded that this belief was honestly held although erroneous."

The attorneys said Wilson, Treasurer Donald W. Dick Jr., and controller Richard I. Pulse "had sufficient information to require further inquiry into the accounting practices" of the grocery division.

Wilson and corporate secretary James Harrison "had knowledge of the fictitious nature" of some accounting forms and "should have known" that the false forms were being used for accounting improprieties.