Navistar International Corp. said it will restate its results for 2002 through 2004 and for the first nine months of fiscal year 2005 as a result of an ongoing review of accounting matters that have prevented the company from filing its 2005 annual report and first quarter 2006 quarterly report on time.
In addition, the maker of commercial trucks and diesel engines said it has fired its long-time auditor, Deloitte & Touche, replacing it with KPMG LLP. Deloitte had served as Navistar’s auditor for 98 years, according to Reuters.
The company also said it cannot determine when it will file its 2005 annual report because of the auditor change.
Back in January, Navistar said in a regulatory filing that it would not file its fiscal 2005 annual report on time because it was still in discussions with its outside auditors about a number of open items, “including some complex and technical accounting issues.”
Back in July, we reported that the Public Company Accounting Oversight Board (PCAOB) was investigating Deloitte’s 2003 audit of Navistar, citing Bloomberg, which based its report on a document it said authorized the probe.
This would be the PCAOB’s first formal probe of a Big Four firm, the wire service pointed out back then. Bloomberg also noted that the two-page order, issued in May, was inadvertently disclosed by the Securities and Exchange Commission.
Commenting on the newly announced restatement, Bill Caton, Navistar’s executive vice president of finance, said in a press release the company has identified a number of items that require restatement, including accounting for anticipated external funding of product development programs; timing of recognition of amounts deemed to be collectible from certain suppliers, including rebates and warranty recoveries; accounting for warranties to be provided by the company outside of the terms of the contractual arrangements; and shifting balances and expense amounts between reporting periods at one of the company’s foundry operations.
“The company’s review process continues and will likely result in the identification of additional items requiring correction in the restated results,” Caton added in the press release.
Navistar also named James A. Blanda interim corporate controller. He is currently a partner with Tatum LLC, an interim executive services and consulting firm.
Blanda served as senior vice president, financial services and chief financial officer for the Chicago Stock Exchange from 1998 to 2004 and vice president and controller for Sears, Roebuck and Co. from 1992 to 1998.