Sunday, January 23, 2005

Certification Fears and Filing Delays

Did a provision of Sarbanes-Oxley encourage a small but fast-growing company to delay the filing of its year-end and quarter-end results? Medical-imaging software company Vital Images Inc., which had planned to announce its financial results on February 17, has postponed the release until March 3.

Bear in mind that chief financial officer Gregory S. Furness resigned earlier this month, effective February 8. The company announced at the time that Michael Carrel, senior vice president of consulting firm Technology Solutions Co., would join Vital Images on January 17 as its interim CFO, though he would continue working for Technology Solutions.

On Friday, Vital Images announced that "we are delaying our earnings report to give Mike sufficient time to become familiar with our accounting processes and thoroughly review our full-year and fourth-quarter results," according to a statement by president and chief executive officer said Jay D. Miller.

The company did not elaborate further. One possible reason for the delay, however, could be related to Sarbanes-Oxley requirements that the CEO and CFO certify their company's annual results. It's possible that the company and Carrel both felt that he needed more time to be fully confident that the financials were in order before he signed off on the results. After all, he did happen take the job just as the year-end books were closing.

Certification Fears and Filing Delays

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