Truck maker Navistar International said it would strengthen its internal controls and financial reporting as it announced a $1.12 billion financial restatement.
The restatement covers 2003 and prior periods, along with 2004 and the first three quarters of 2005. The company said it had identified a number of material weaknesses in its internal controls.
Most of the problems were due to lack of proper accounting knowledge, resulting in misapplication of generally accepted accounting principles. However, Navistar also acknowledged that it had identified instances of intentional misconduct that resulted in some restatement adjustments. Most of the individuals involved are no longer with the company.
"Our leadership team is committed to strengthening our control environment and reemphasizing the importance of operating within our values and guiding behaviors, which are grounded in simply doing the right thing," said Navistar chairman and CEO Daniel Ustian in a statement.
To address these issues, the company has realigned its accounting reporting and finance structure, and developed a plan to reinforce the importance of ethics, integrity, accountability and communication within its corporate culture. Navistar also hired more than 50 additional accounting employees and hired a new vice president of internal audit, chief accounting officer and chief information officer.
