GM's accounting subject of inquiry
Tuesday, October 31, 2006
GM's accounting subject of inquiry
SEC, grand jury, U.S. Attorney investigating errors in automaker's earnings reports.
David Shepardson / Detroit News Washington Bureau
WASHINGTON -- Accounting questions at General Motors Corp. still loom large, especially after the Securities and Exchange Commission leveled civil fraud allegations against 13 people, including nine former Delphi Corp. executives.
GM has disclosed it is the subject of several investigations into various aspects of its accounting, including a formal SEC inquiry stemming from the investigation into Delphi. A federal grand jury and the U.S. Attorney's Office in Manhattan are also looking into GM's accounting.
In March, GM was forced to restate its earnings from 2000 to 2005, and the company disclosed errors similar to some Delphi had acknowledged, especially those involving supplier credits.
In May 2000, GM told Delphi it owed between $350 million and $800 million for "purportedly defective parts" Delphi sold before the separation in 1999, the SEC said. Delphi didn't have enough in reserves to cover it.
GM said in March "a federal grand jury recently issued a subpoena in connection with supplier credits."
GM said it overstated income in 2001 by $405 million -- or 35 percent -- due to incorrectly recording supplier credits. GM also reduced income in both 2000 and 2002 by about $100 million due to credits.
GM also said it erroneously booked a $27 million gain on selling precious metals in 2000 that was actually a financing transaction.
In 2001, GM erroneously recorded a $55 million settlement as a credit and the company has since booked it as a warranty.
GM spokeswoman Gina Proia declined to comment as did the SEC and assistant U.S. Attorney Helen Cantwell, who is leading the criminal investigation into GM's accounting.
In May, GM said its controller was retiring and its chief accounting officer, Peter Bible, had resigned. GM also retained an outside financial advisory firm, Southfield-based AlixPartners, to assist in a broad range of accounting, financial reporting and related matters.
You can reach David Shepardson at (202) 662-8735 or dshepardson@detnews.com.
© Copyright 2006 The Detroit News. All rights reserved.
GM's accounting subject of inquiry
SEC, grand jury, U.S. Attorney investigating errors in automaker's earnings reports.
David Shepardson / Detroit News Washington Bureau
WASHINGTON -- Accounting questions at General Motors Corp. still loom large, especially after the Securities and Exchange Commission leveled civil fraud allegations against 13 people, including nine former Delphi Corp. executives.
GM has disclosed it is the subject of several investigations into various aspects of its accounting, including a formal SEC inquiry stemming from the investigation into Delphi. A federal grand jury and the U.S. Attorney's Office in Manhattan are also looking into GM's accounting.
In March, GM was forced to restate its earnings from 2000 to 2005, and the company disclosed errors similar to some Delphi had acknowledged, especially those involving supplier credits.
In May 2000, GM told Delphi it owed between $350 million and $800 million for "purportedly defective parts" Delphi sold before the separation in 1999, the SEC said. Delphi didn't have enough in reserves to cover it.
GM said in March "a federal grand jury recently issued a subpoena in connection with supplier credits."
GM said it overstated income in 2001 by $405 million -- or 35 percent -- due to incorrectly recording supplier credits. GM also reduced income in both 2000 and 2002 by about $100 million due to credits.
GM also said it erroneously booked a $27 million gain on selling precious metals in 2000 that was actually a financing transaction.
In 2001, GM erroneously recorded a $55 million settlement as a credit and the company has since booked it as a warranty.
GM spokeswoman Gina Proia declined to comment as did the SEC and assistant U.S. Attorney Helen Cantwell, who is leading the criminal investigation into GM's accounting.
In May, GM said its controller was retiring and its chief accounting officer, Peter Bible, had resigned. GM also retained an outside financial advisory firm, Southfield-based AlixPartners, to assist in a broad range of accounting, financial reporting and related matters.
You can reach David Shepardson at (202) 662-8735 or dshepardson@detnews.com.
© Copyright 2006 The Detroit News. All rights reserved.
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