Omnicom defends accounting practices

Chief executive John Wren said there were ‘no skeletons in the company closet’ and defended the integrity of the company. The company recently sacked Andersen and replaced the firm with KPMG.

Trouble for Omnicom began after a front-page story in the Wall Street Journal questioned the company’s accounting practices-related to acquisitions and the move of internet assets into a new outside entity called Seneca.

According to reports, questions relate to how the company distinguishes between organic growth and growth from acquisitions.

The news followed the resignation of Robert Callander, chairman of Omnicom?s audit committee.

The allegations sent Omnicom stock into free fall. The share price lost 13% of its value on the NYSE. It was last trading at $55.65. Last week Wednesday, the stock was valued at more than $75.

According to the FT, Omnicom directors are expected to make further public statements defending the company from allegations.

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