Adecco Executives Resign Amidst Accounting Probes
The Swiss temporary-staffing company Adecco SA announced Friday that its chief financial officer and the head of its North American branch have resigned as the result of an accounting investigation into alleged accounting problems.
Adecco acknowledged that the U.S. Securities and Exchange Commission and the U.S. Attorney's Office for the Southern District of New York are both looking into the matter and said the company is cooperating, the Wall Street Journal reported.
Andres Cano, the company’s controller, will temporarily replace Chief Financial Officer Felix Weber while the board seeks a permanent replacement, the company stated, adding that Julio Arrieta resigned as chief executive officer of Adecco Staffing North America.
Behind the resignations are possible accounting problems at the company. "Certain material weaknesses in the Adecco's internal controls and practices have been brought to light," the company said Friday.
The Journal reported that the company said the "material weaknesses" relate to Adecco Staffing North America and include "reconciliation of payroll bank accounts; application of accounts receivable; and several issues affecting revenue recognition including lack of systematic documentation of agreed rates and hours; billing errors not timely identified and corrected; and lack of segregation of duties in the branches increasing the likelihood of undetected errors."
The company stated the problems have been corrected "and the balance are being actively addressed." The company added that its Audit and Finance Committee has "initiated certain measures to help to identify any further weaknesses and permanently to resolve them."
"The chief focus of these measures is to investigate accounting, control and compliance issues in the U.S. and in certain other countries, as well as to investigate accusations made by 'whistle-blowers' in the U.S.," the company said.
Adecco also said the New York law firm Paul Weiss, Rifkind, Wharton & Garrison LLP has been brought in to conduct an investigation of the potential problems.
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