Accounting & Tax

SEC Investigating BearingPoint

The commission has requested documents concerning the internal control deficiencies identified last month, according to the consultancy.
Stephen TaubApril 22, 2005

The Securities and Exchange Commission has launched an informal investigation of BearingPoint, according to the company formerly known as KPMG Consulting.

The consultancy stated that the SEC staff had requested documents concerning internal control deficiencies identified on March 18, prior restatements, and other matters, and that it is cooperating in the inquiry.

BearingPoint also warned that its accountants may issue a “going concern” addressing the company’s ability to continue to operate through the end of 2005. The company added that it will not hold its annual shareholders meeting on May 11 as previously scheduled, in light of its inability to file its 2004 financial statements. The consultancy said it will hold its annual meeting as soon as “reasonably practicable” after filing its 2004 annual report.

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BearingPoint’s share price plunged more than 30 percent on a day that most market indexes rose about 2 percent.

In November, chief financial officer Robert Falcone said he would retire, and the company announced that it found a $92.9 million accounting error.

Last month, when BearingPoint announced that it would not file its 2004 annual report on time, the company also named former Oracle Corp. and Accenture chief financial officer Harry You as its new chief executive officer.