Tuesday, December 21, 2004

BearingPoint Warns on Controls

A month after the departure of its chief financial officer, BearingPoint Inc. said in a regulatory filing that it may be unable to complete all of the work necessary to present its report on internal controls required by Section 404 of the Sarbanes-Oxley Act or to conclude that its internal controls are effective.

BearingPoint added that while it expects to complete its evaluation and testing of its internal controls by the time it must file its 10-K for the year ending December 31 — due no later than March 16, 2005 — if "we have any material weakness, we will not be permitted to conclude that our internal controls are effective."

Even if the company had time to take remedial actions that corrected the material weakness by year-end, BearingPoint added, the remediated controls would probably not be in operation long enough to allow its auditor, PricewaterhouseCoopers, to conclude that they are effective. That makes it likely that PwC will provide either an adverse or disclaimed audit opinion, added the consultancy.

BearingPoint Warns on Controls

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