Interpublic Postpones Annual Report Filing Over Accounting Errors
The beleaguered New York company, still recovering from a 2002 accounting scandal, also warned it may have to restate past results because of the discovery of new bookkeeping mistakes.
The accounting errors pertain to acquisitions from 1996 to 2001, with $145 million in revenue and $25 million in net income that may have been improperly recognized in those years.
The discrepancies were unearthed in the early stages of an Interpublic review after Michael Roth took over as the new chairman/CEO. More problems in other areas may yet be discovered, giving rise to the fear of new shareholder lawsuits as was the issue with the November 2002 misstatement.
"The extensive review process we have undertaken is appropriate given the material control weaknesses we face," Roth said in a statement. "We were unable to provide details concerning the status or timing of our filing and earnings release until having come to this point in our process.
"We regret this, as well as the delay that will result. But the actions we are taking are consistent with our stated desire to thoroughly address internal controls and move beyond our financial reporting issues."
The company will offer an update March 17 on the state of its annual report.
Interpublic owns agencies like McCann-Erickson, Draft, MRM Partners, Carmichael Lynch, Hill Holliday, Foote Cone & Belding, Lowe & Partners Worldwide, Initiative, Campbell Ewald, Jack Morton, Deutsch, The Martin Agency and Weber Shandwick. It is one of the world's largest agency holding firms, after New York-based Omnicom Group Inc. and Britain's WPP Group PLC.