The Securities and Exchange Commission has told Goodyear Tire & Rubber Co. that it will likely recommend enforcement action for accounting errors originally disclosed two years ago.
Goodyear announced Tuesday that the warning from the SEC came in the form of a Wells notice, saying the pending action covered alleged accounting and record-keeping requirements violations outlined in the Securities and Exchange Act of 1934. Goodyear, the country's largest tire maker, said that it expects to have the opportunity to respond before the SEC staff makes a formal recommendation.
In October 2003, Goodyear announced that accounting system errors would force it to lower net income for the previous five years by up to $100 million. The company blamed the problems on a computerized system implemented in 1999 that was used to track purchases of foreign factory equipment and caused errors with its internal billing system.The company also said that it has been told that Wells notices were issued to a former chief financial officer and a former chief accounting officer, and that both Goodyear and the former employees would continue to cooperate with the SEC.
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