Four months after Novatel Wireless announced an internal accounting review of its revenue-recognition practices, it has concluded that no restatement is necessary. The company said it does not expect to report any material weaknesses in its filings for the first two quarters of 2008, which were delayed pending completion of the review.

The broadband company’s audit committee also found that there was no accounting misconduct by the senior management team, Novatel Wireless said.

The audit committee did make recommendations “to enhance the company’s revenue cut-off policies and procedures,” and for additional training on the new policies and procedures, the company noted.

Novatel Wireless said in May that it had launched the review of its revenue cut-off procedures, internal controls, and accounting related to customer contracts for which revenues were recognized in fiscal years 2007 and 2008.

In August, the company said the audit committee, independent counsel, and outside accountants had identified six transactions for further accounting review, principally as to whether shipments were recognized as revenue in the appropriate quarter.

As a result, the company moved about $3.4 million of revenues and associated expenses from the first quarter to the second quarter of 2008.

At an industry meeting last week, Paul Bijou, deputy director of inspections at the Public Company Accounting Oversight Board, noted that revenue recognition issues top the list of deficiencies found during audit reviews. He noted that issues related to “revenue cut-off” and “contracts leading to revenue” especially trip up auditors.

Furthermore, Martin Bauman, director of the PCAOB’s Office of Research adn Analysis, said that the Securities and Exchange Commission receives more comments and questions about revenue recognition than any other accounting process.

“Revenue recognition is one of the most complicated auditing and accounting processes, and yet it is the most fundamental thing a business does,” remarked Ray during a conference sponsored by the New York State Society of Certified Public Accountants. U.S. and international standard setters have included a revision of revenue-recognition rules as a priority projects for the coming year.

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