Risk & Compliance

Dell Delays Another Report

As the audit committee winds down its internal probe, Dell has to push back its SEC filings, yet again.
Stephen TaubJune 15, 2007

Questions arising from an audit-committee investigation into Dell Inc. have forced the company to delay it most recent quarterly filings. Dell officials say the company will delay quarterly reports for the first three months of fiscal 2008, which ended May 4.

The Securities and Exchange Commission and the audit committee are conducting investigations into certain accounting and financial reporting matters. In addition, last year Dell received a related subpoena from the U.S. Attorney for the Southern District of New York.

Dell officials elaborated in a regulatory filing that the company is in the final phases of the audit-committee probe, and that board members are reviewing each of the identified accounting errors and proposed remedies. When it completes the review, the audit committee will determine whether the company needs to restate previously issued financial statements. So far the board members have not determined whether any identified control deficiencies constitute material weaknesses, the company noted.

Dell already has delayed the filing of its quarterly reports for the second and third quarters of fiscal 2007, as well as its annual report for fiscal 2007. The company said it would file these reports and the first-quarter report for fiscal 2008 “as soon as possible.”

In March Dell announced that it had identified several accounting errors, evidence of misconduct, and deficiencies in its financial-control environment. The announcement followed the December appointment of Donald J. Carty, Dell’s new vice chairman and chief financial officer. Carty replaced James M. Schneider, who had left to become executive chairman of Frontier Bancshares Inc.

After Carty joined the company, founder Michael Dell returned as chief executive officer in January, while retaining his position of chairman. He succeeded Kevin Rollins, who took the helm three years ago.