Dell Hit by $150m Accounting Scandal

Via vnunet.com -

Dell is forced to restate between $50m and $150m in net income over 2002 through the first quarter of this year.

The lower revenues amount to less than a 1 per cent reduction of the period's aggregate net income of $12bn.

A company investigation found that employees made adjustments to reserve and liability accounts to achieve certain performance and financial targets at the close of a quarter. The investigation also found evidence that excess balances were used to offset unrelated expenses in later periods.

Dell admitted that it "did not maintain effective controls over the period-end reporting process". It has fired or reprimanded responsible staff members. The PC maker furthermore is reorganising its accounting department to separate accounting and financial reporting from the planning and forecasting.

The Securities and Exchange Commission has launched an investigation into the accounting irregularities with the computer maker and that investigation is set to continue. The SEC investigation furthermore forced the PC maker to delay its earnings release.