PwC reviewing Netstore overstatements

Netstore, has admitted that accounting problems will bite into the company’s
fortunes, leading to
significant reduction’
in 2007 profits.

The flaws came to light as the IT security and outsourcing company was
upgrading its accounting systems following a management overhaul last year.

Netstore said the problems centred on cost accrual and revenue recognition
accounting policies being incorrectly applied.

The company said: ‘As a result of the discovery of these discrepancies
PricewaterhouseCoopers has been appointed to conduct an independent review.The
review is ongoing and the outcome is not yet certain but management’s current
expectation is that it will result in a significant reduction to the previously
reported profit before tax in accounting periods to 30 June 2007.’

FD David Memory has been spearheading the upgrades, which included
streamlining four complex accounting systems into one, after being appointed in
September 2007.

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