A special committee of the board of directors at Bell Microproducts found that “accounting errors and irregularities” it determined to have occurred at the company were caused by, among other things, “accounting decisions and entries that appear to have been directed at achieving financial results consistent with external estimates,” according to a release the company issued Monday.
The committee also faulted “inadequate supervision of employees involved in the accounting process” and “”erroneous or unsupported judgments regarding the proper application of generally accepted accounting principles,” and recommended steps the company should take to make “enhancements and changes to (Bell Micro’s) control environment” as well as “upgrading the expertise and training of (Bell Micro’s) finance personnel.”
The release also mentioned “certain finance personnel actions which have been initiated”
without using the word termination.
The news evidently buoyed those on Wall Street who follow the San Jose electronics distributor. Its shares, which trade on the Pink Sheets after they were delisted by Nasdaq in March over the company’s failure to file financial results with the SEC since August 2006, gained 59 cents, or 29.5 percent, to $2.59.
After the markets closed, the company filed yet another notification of late filing with the
SEC for its most recent results. Although the special committee finished its work looking into the accounting problems, and the company “currently estimates” that the total change to net income for the review period “will be less than $5 million”, the restatement process has yet to be completed by the accounting department. That must be a happy place to work these days.