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08 May 2009
Deloitte is to pay out $950,000 (£630,000) as part of a settlement with investors of Beazer Homes USA, after a class-action lawsuit was filed claiming the firm failed to spot inaccuracies in the company’s accounts.
The Big Four firm had been named alongside Beazer and former Beazer executives in a lawsuit claiming $30.5m. Investors had accused Beazer of managing earnings, recognizing revenue earlier than allowed under US GAAP, improperly accounting for sales/leaseback transactions, creating ‘cookie jar’ reserves, and not recording land and goodwill impairment charges at the proper time, according to CFO.com.
The complaint, filed nearly two years ago, said Deloitte had turned a ‘blind eye’ to a number of red flags that should have alerted them to potential violations of GAAP rules.
The settlement payment is pending approval from the Northern District Court of Georgia.
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Briefings
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