Whistle-Blower Forces Bisys Filing Delay

The business-processing-outsourcing services provider reported that a current employee raised issues about the company's preparation for a SAS 70 r...
Stephen TaubSeptember 15, 2004

Bisys Group Inc will delay filing its annual report for the fiscal year ended June 30 after a whistle-blower raised questions about its internal controls.

The company, which provides business-process-outsourcing services to financial companies, said a current employee of its fund services business raised issues in connection with the company’s documentation in preparation for a SAS 70 review. Such reviews assess the internal controls of providers of outsourcing services.

The company advised its board of the development, and the board formed a special committee of independent directors to conduct an investigation, according to Bisys. The special committee has hired an independent counsel to assist in the investigation and the company has reported the matter to the Securities and Exchange Commission, according to Russ Fradin, the company’s president and chief executive officer.

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Fradin said the company is making every effort to file its annual report by September, the deadline for a filing extension.

In May, the company said it would restate its results for more than three years to increase an adjustment to commissions receivable in its life insurance division.