Dell Inc. announced today that it will restate its earnings for fiscal years 2003 through 2006 and the first quarter of 2007 after an internal audit found that certain employees had changed corporate account balances to meet quarterly financial targets. In the new financial results, Dell will cut a total of $50 million to $150 million of net income from its previously reported cumulative total of $12 billion for the entire period. That translates to a reduction in Dell earnings of .02 cents to .07 cents per share from a cumulative total of $4.78 per share, Dell said.
The company also plans to fire, fine or reprimand certain employees for their roles in the scheme. While Dell did not name any people involved, it indicated that the investigation had reached high levels of management.
“We have taken what we believe to be appropriate actions with respect to personnel involved in this. That is up to and including terminations,” said Don Carty, Dell’s vice chairman and chief financial officer, during a Thursday conference call. The company would not say who had been fired in connection with the scandal or how many people it expected to terminate.
The investigation found that Dell staff adjusted account balances and provided incomplete or incorrect information to internal or external auditors, typically toward the end of the quarter, Carty said. There was “evidence that certain adjustments appeared to have been motivated by the objective of attaining financial targets,” he said.