BearingPoint announced that the consulting firm and its auditor, PricewaterhouseCoopers, will review all the firm’s contracts to ensure that revenue has been booked properly, reported ComputerWire, a London-based company that covers the IT industry.
According to the news service, BearingPoint chairman Rod McGeary said at a JPMorgan investment conference in San Francisco: “We are auditing 100 percent of our contracts; we have 9,000 and they have very different flavors and are in different countries. We will audit them first and then hand them over to PwC.”
This exercise will probably further delay the filing of the company’s annual report, ComputerWire suggested. BearingPoint is one of 29 companies that delayed the filing of their March quarterly report because they are restating their results, according to shareholder-advisory firm Glass, Lewis.
(Correction: Due to an editing error, an earlier version of this story attributed to Rod McGeary the statement that “This exercise will probably further delay the filing of the company’s annual report.” In fact, we have no evidence to support the contention that McGeary made any such statement. CFO.com regrets the error.)
BearingPoint, formerly known as KPMG Consulting, stated that it needed to validate financial information due to control deficiencies, and that it needed to confirm information generated by the company’s new financial accounting system, particularly in the area of revenue recognition. The company also stressed its ongoing efforts to complete management’s assessment of its internal controls over financial reporting.
ComputerWire pointed out that BearingPoint, which sells consulting services based on meeting Sarbanes-Oxley compliance demands, has itself reported Sarbanes-Oxley failures. When confronted with this irony, McGeary reportedly joked, “First thing I do is put a towel over my head.” He then acknowledged that the firm had made “serious mistakes” by relying too little on “internal people” and too much on outsiders for its system implementation.