In yet another corporate scandal, Dell admitted to repeatedly lying about its financial results and said it had cooked its books for several years to meet financial targets.
After an internal probe revealed the accounting manipulations and irregularities – which usually occurred at the close of a quarter – Dell intends to restate the results relating to fiscal 2003, 2004, 2005, 2006 and the first quarter of 2007.Â
Dell said the restatement would cut profits by $50 million-$150 million.
While the numbers may seem small for a multi-billion dollar company, Dell is suggesting the irregularities are significant.
“The accounting errors and irregularities that will be corrected are significant because of the combination of the number of issues identified, the qualitative nature of many of the issues, and in some cases, the dollar amounts involved,” the Round Rock, Texas company said Thursday.
Dell has been struggling in the face of a resurgent HP, consumer pullback in spending and strong competition from PC vendors like Acer, whose prices are significantly lower than similarly-configured Dell computers.
While Dell did not identify the individuals responsible for the illegal actions, the company claimed that the adjustments are not expected to have a material impact on the current balance sheet and on cash flows during the restatement period.
Also, the restatementsÂ are not expected to have a significant effect on the reported results of future operations.
The irregularities came to light in the course of an Securities and Exchange Commission investigation into Dell’s accounting and financial reporting practices.
The SEC investigation into Dell’s shenanigans continues.
Dell is promising remedial action related to the irregularities uncovered by its Audit Committee.
Dell has a major presence in India with over 10,000 employees involved in customer support and server and storage product development.