16:17 DELL Dell says independent investigation completed; will restate financials (25.93 -0.37) -Update-
Co announces that its Audit Committee has completed its independent investigation into certain accounting and financial reporting matters. As a result of accounting errors and irregularities identified in that investigation and in additional reviews conducted by management, the Audit Committee has determined to restate the co's financial statements relating to fiscal 2003, 2004, 2005 and 2006 (including the interim periods within those years) and the first qtr of fiscal 2007. Dell's previously issued financial statements for those periods should no longer be relied upon. The restatement will correct the accounting errors and irregularities that have been identified through the Audit Committee investigation and by management as a result of its additional reviews. Consequently, the restatement is expected to have the following effects: 1) net revenue for each annual period is expected to be reduced by less than 1 percent of the previously reported revenue for the period; 2) the cumulative change to net income for the restatement period is expected to be a reduction of between $50 mln and $150 mln; 3) the adjustments are not expected to have a material impact on cash flows during the restatement period and are not expected to have a significant effect on the reported results of future operations... As a result of the investigation issues, as well as other issues separately identified by management, current mgmt has concluded the co did not maintain an effective control environment, including a tone and control consciousness that consistently emphasized strict adherence to Generally Accepted Accounting Principles. In addition, current mgmt has concluded that the co did not maintain effective controls over the period-end reporting process, including controls with respect to the review, supervision and monitoring of accounting operations... As previously disclosed, the Audit Committee investigation began as a result of concerns raised by documents and information discovered in the course of responding to requests from the Enforcement Division of the SEC in connection with an investigation into certain of our accounting and financial reporting practices. While the restatement will address all of the issues identified in the Audit Committee investigation and in the additional reviews conducted by management, the SEC's investigation is ongoing, and there can be no assurance that there will not be additional issues or matters arising from that investigation. (Stock is halted) |
