Recent Action In Restatement-Land

From AAO Weblog

Taking a break from the SAB 108 beat for a while, it’s easy to notice there are some pretty interesting restatements going on out there…

International Rectifier, for instance. The integrated circuit maker filed a non-reliance 8-K recently, planting the black flag on its issued financial statements as far back as September 30, 2005. Reason? “…some accounting irregularities at a foreign subsidiary. These accounting irregularities include, among other things, premature revenue recognition of product sales.” IRF’s investigation is still in the early stages, and they leave open the possibility that other periods preceding the year ended June 30, 2006 could be subject to the probe. The management report on the internal controls (”they work”) issued at June 30, 2006 has also been rescinded, obviously.

Another restatement in the works, though much farther along in progress, belongs to Thor Industries. In January, the manufacturer of various brands of recreational vehicles announced problems with the accounting for inventory, accounts receivable, accounts payable, and cost of goods sold at its Dutchmen Manufacturing subsidiary. For the time being the company has tracked down its total misstatement of net income to a level of $16 million; the periods to which that $16 million haven’t been finalized yet. They’ve barred reliance on their financial statements as far back as fiscal year 2004, however.

The basic blocking and tackling of accounting for a company’s activities isn’t easy to keep paying attention to – and as the case of IRF shows, it’s even harder to keep focused on when you’re dealing with foreign operations. These recent flawed financials show the difficulty companies have with simply sticking to the basics: none of the issues relate to “complex” accounting standards.

http://www.accountingobserver.com/blog/