BearingPoint, the consultancy formerly tied to accounting firm KPMG, disclosed that the Securities and Exchange Commission has launched an informal probe into the company's accounting practices.
In an 8-K filed last week, the McLean, Va.-based company said that it was advised by the SEC's Enforcement Division on April 13 that the commission is conducting an informal investigation. The SEC staff requested that BearingPoint produce various documents, including documents concerning internal control deficiencies identified last month and prior-period adjustments, according to the company.
BearingPoint, which said that it is cooperating in the inquiry and will produce the requested documents, also warned that its financial statements for the first three quarters of fiscal 2004, for the six-month transition period ended Dec. 31, 2003, and for the fiscal year ended June 30, 2003, shouldn't be relied upon. In addition, the firm said that it doesn't know when it will file its 10-K for FY 2004, and that its quarterly reports for the rest of this year most likely won't be filed on time, either.
The company said that it expects to record a loss for the three months ended March 31 and for 2005. In the same filing, the consulting outfit also warned that its auditor may issue a going-concern statement, indicating that the company doesn't have enough cash to support operations through the end of the year.
Back in December, BearingPoint disclosed that it received a subpoena related to certain software resale transactions with San Diego-based Peregrine Systems Inc. between 1999 and 2001.
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