PracticeAuditAccounting errors embarrass GM CFO

Accounting errors embarrass GM CFO

CFO's memo says GM's turnaround is 'accelerating' despite embarrassing errors that have delayed its financial reporting

The CFO of General
Motors
has written to the company’s staff about his embarrassment at having
to delay the auto manufacturer’s 2006 financial reporting.

In an email sent to employees on Friday, Fritz
Henderson
said the company looks forward to issuing fourth-quarter and
full-year financial statements for 2006 by the end of February.

‘Errors that require restatements are unacceptable and embarrassing for the
corporation and for me personally,’ said Henderson.

Henderson also said the financial statements show ‘a great number of
positives and that GM’s turnaround is accelerating’.

Last week, Henderson announced that the world’s largest auto manufacturer
would also have to restate earnings, in the face of a series of accounting
errors.

GM said the changes were due to tax
accounting adjustments, while GM’s former
finance arm, GMAC, could not supply information on time needed for the
fourth-quarter results. The company restated results in seven of its last eight
quarters.

The Securities & Exchange Commission and US Department of Justice are now
investigating the company’s accounting problems, particularly looking into its
handling of supplier credits and its relationship with its bankrupt former unit,
Delphi Corp.

Last year, GM reported a $10.6bn loss for 2005, after restating the result it
issued previously.

Further reading:

Errors
in accounting embarrass GM exec

GM delays fourth quarter results

Delphi settlement with SEC approved

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