PCAOB Inspection Stops the Presses

A disagreement over accounting at a print-technology company holds up its annual report.
Stephen Taub and Dave CookMarch 14, 2007

Presstek, a favorite target of Wall Street short-sellers during the 1990s, will delay filing its 2006 annual report due to a dispute with the Public Company Accounting Oversight Board.

The print-technology company explained that after a routine PCAOB inspection of the company’s former auditors, BDO Seidman, the PCAOB disagreed with Presstek’s accounting for certain new-product costs in fiscal 2005.

Presstek asserted that it has consistently accounted for these costs, totaling about $1 million over fiscal 2005 and 2006, as intangible assets.

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The company added that it will request that the Securities and Exchange Commission not object to its accounting treatment. Presstek warned that it does not anticipate a reply before the annual-report filing deadline, adding that after the SEC completes its review, the company will submit all required filings as quickly as possible.

Presstek also stressed that the matter will not affect cash flow and does not change its previously provided 2007 guidance.