Interpublic said it doesn't know when it will file its fourth-quarter and 2004 financial results and 2004 annual report.
The agency holding company March 11 disclosed it may restate earlier financial reports, mainly because it may have "improperly recognized" revenue and income tied to acquisitions from 1996 to 2001. In an expanded disclosure March 17, Interpublic said a restatement "could also affect periods after 2001."
Interpublic offered details on widespread "material weaknesses" it found in internal financial controls in an evaluation required under the Sarbanes-Oxley Act. It warned: "Each of the company's material weaknesses results in more than a remote likelihood that a material misstatement of the annual or interim financial statements will not be prevented or detected."
Interpublic said: "Our [financial] control environment does not adequately ensure the following matters consistently across the organization: compliance with our own policies and procedures, including those contained in the Interpublic Group code of conduct; adequate financial oversight at various levels within the organization; and an adequate staff of competent accounting personnel with knowledge of GAAP [generally accepted accounting principles]."
The disclosures could draw interest from the Securities and Exchange Commission, which began a formal investigation of the company in January 2003 after Interpublic revealed bookkeeping errors and restated its financial reports for 1997 to 2001.
Interpublic said it is still doing a lot of bookkeeping analysis manually. "Heavy reliance on manual procedures persists because systematic processes are not in place to adequately identify and manage significant business risks that may impact financial statements and related disclosures," the company said.
Uncertainty about Interpublic continues, keeping a dark cloud over the company. Interpublic will offer more details in an investors' conference call April 5. Details on Interpublic's latest disclosure: AdAge.com QwikFIND aaq41p