More woes for the Interpublic Group of Cos. Inc.
The advertising giant disclosed that it will restate results for the first three quarters of 2005 and that controller and chief accounting officer Nicholas S. Cyprus has resigned.
Interpublic elaborated that the restatements, which will reduce earnings by a total of $14.1 million for the period in question, mainly involve accounting for goodwill impairment, revenue recognition, lease accounting, and international compensation arrangements, reported the Associated Press.
Interpublic’s auditor, PricewaterhouseCoopers, stated that ineffective controls — including poor procedures, insufficient numbers of qualified accounting personnel, and lack of a proper monitoring system — led to the current restatement, according to the AP.
In September, Interpublic announced that it would restate its financials for the years 2000 through 2004 after discovering accounting errors as well as evidence of “possible employee misconduct.” The Securities and Exchange Commission has also been investigating the company’s restatements going back to 2002.
The company’s finance department hasn’t exactly found solid footing, either. Last June, CFO Robert Thompson left the company after just one year on the job.
As for controller and accounting chief Cyprus, he will be succeeded by Christopher Carroll, who came onboard in 2005 as controller of the company’s McCann Worldgroup unit. Previously, he served as worldwide controller of Avaya Communications and financial vice president of Lucent Technologies. Earlier in his career, he spent 10 years in public accounting at the New York offices of PricewaterhouseCoopers, specializing in technology and communications.