Archive for Thursday, August 15, 2002

SEC deadline reveals more errors

Household Inc. among companies to restate earnings

August 15, 2002


— Investors jarred by a wave of accounting scandals were jostled by smaller ripples Wednesday as several big companies restated their finances against a deadline to swear to the accuracy of financial reports.

After waiting until the last minute, scores of major corporations rushed to comply with a new government order holding top executives' feet to the fire by requiring them to vouch in writing for the veracity of recent financial reports.

The unprecedented requirement was designed to restore confidence in corporate America.

In a major revision Wednesday, Household International Inc., the nation's No. 2 consumer finance concern, disclosed that it earned $386 million less than previously reported over the past nine years. Investors were unperturbed, boosting Household's stock by 29 cents to $38.09 by the close of trading on the New York Stock Exchange.

The company, which issues MasterCard and Visa credit cards and makes home equity and car loans, said the restatement came after its new auditors reviewed its accounting for "complex" credit-card contracts.

In addition to Household, companies making restatements this week: Convenience-store retailer The Pantry Inc., which said it had found an "inadvertent" $8 million accounting error in its reports for the first and second quarters. And Interpublic Group of Cos., a major advertising business, said it had identified $68.5 million in expenses that had not been properly accounted for. The company is restating its earnings back to 1997.

Commenting has been disabled for this item.