Audit problems send Adecco shares tumbling

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The company said it could not say when the accounts, originally due for 4 February, would now be completed. Ernst & Young is the company’s auditor.

The news sent stocks in the Swiss-based company into a nose-dive, falling 38%. The BBC reported that Investment Houses Bank Leu and DKW had changed their recommendations from ‘buy’ to ‘sell’.

The company has launched an independent inquiry, but the precise nature of the problems it will investigate remain unclear. Adecco said in a statement that ‘material weaknesses in internal controls’ had been identified in North American operations of Adecco Staffing, the group’s core business.

It also indicated concerns extend beyond the US, with ‘possible accounting, control and compliance issues in the company’s operations in certain countries’.

Adecco has a UK operation, but it is not yet known whether it is among those under investigation. It operates Ajilon, AOC, Computer People, Jonathan Wren, Lee Hecht Harrison and Roevin.

Adecco employs 28,000 people in 68 countries, and reported sales worth £11.1bn in 2002.

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