After a six-month internal investigation, Interpublic Group this morning issued a restatement of its earnings - reduced by more than half-a-billion dollars between 2000 and 2004 - reports AdAge. IPG also reported that net losses for 1H05 had been reduced to $139 million from $182 million in 1H04, while revenue had increased 1.5 percent to $2.95 billion.
About $56 million in reductions was the result of fraud: "These cases took place primarily outside of the United States. Seven instances of employee misconduct account for approximately 80 percent of the adjustment in this category," IPG said.
About half of retained earnings reduction was attributed to revenue recognition problems. About $184 million had to do with vendor discounts; adjustments for earn-outs made up about $70 million; $30 million had to do with incorrect recognition of expenses and revenue for acquired business.
