Restated accounts will increase Visteon’s previously reported $1.499 billion after-tax net loss for 2004 by $35-40 million, or approximately 3%; the company said in a statement.
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The previously reported after-tax net loss of $1.207 billion for 2003 will increase by $20-25 million, or approximately 2%, and its previously reported after-tax net loss of $368 million for 2002 by $10-15 million, or approximately 4%.
Visteon’s audit committee – which appointed external lawyers and forensic accountants – scrutinised the company’s purchasing operations and found that certain expenses for freight, raw materials and other supplier costs originating in North America were recorded in periods after December 31, 2004, and should have been recorded in prior periods.
The committee concluded Visteon would need to restate results for the years ended December 31, 2004, 2003 and 2002.
“Visteon is assessing the impact of these corrections and other adjustments on previously announced financial results for 2005,” the company said in the statement, adding that it would file restated accounts with US government authorities in the fourth quarter of 2005.
“The Audit Committee’s independent review has also determined that many of the accounting errors resulted principally from improper conduct on the part of two former, non-executive finance employees responsible for the accounting oversight of these matters, and specifically from the periodic setting of accruals for freight expenses at inadequate levels, as well as delays in the processing of freight payments and raw material price increases without adequate consideration of applicable accounting standards,” the statement added.
