Dell Forced to Delay Quarterly Report
Once again, Dell will delay filing financial reports with the U.S. Securities and Exchange Commission, citing the companys own probe into its accounting practices.
In a letter to the SEC filed June 14, executives with the Round Rock, Texas, PC vendor told federal officials that they could not file several forms, including the companys 10-Q and 10-K annual report, while the internal investigation continued.
"As a part of the final phases of the investigation, the Audit Committee is in the process of reviewing each of the identified accounting errors and proposed correcting adjustments," said Dells letter to the SEC.
"Upon completion of that review, the Audit Committee will evaluate the impact and nature of the errors to determine whether a restatement of any previously issued financial statements will be required," the letter added. "To date, the Audit Committee has not determined whether any restatements will be required, or whether any identified control deficiencies constitute material weaknesses."
In addition to its own internal audit, which is looking at the companys accounting practices, Dell has acknowledged that it has received a subpoena from the U.S. Attorneys Office for the Southern District of New York. It is unclear what federal prosecutors asked for specifically in the subpoena.
Dells internal financial problems date back to the middle of 2006, when the company first announced that the SEC had begun an inquiry into its accounting practices.
Besides its financial problems, Dell has been looking to gain back some of the momentum it has lost to Hewlett-Packard, which has taken the helm as the worlds largest PC vendor.
In January, Michael Dell returned as CEO of the company and Dell has started to remake its image by offering more choices for its consumers, including PC models that come with Linux pre-installed; a different sales model that will include more interaction with channel partners; and selling desktops and notebooks though retail stores like Wal-Mart.
Some analysts believe that Dell has to move past its internal accounting problems in order to concentrate on sales and technology. In its letter to the SEC, executives said the company would "file the quarterly reports for the second and third quarters of fiscal 2007, the annual report for fiscal 2007, and the quarterly report for the first quarter of fiscal 2008 as soon as possible."
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