Gemstar's Dispute With KPMG Goes to SEC

Faced with possible delisting by the NASDAQ Exchange, Gemstar-TV Guide announced last week that it is requesting guidance from the U.S. Securities and Exchange Commission (SEC) to resolve a dispute between its audit committee and its auditor, KPMG.

The dispute involves details of the company's financial results for the quarter ending June 30, 2002. On August 14, 2002, Gemstar said its audit committee has been conducting a review of the company's revenue recognition policies. Based on that review, management intended to reverse the recognition of approximately $20 million of revenues and $20 million of associated amortization expense. Both amounts relate to a non-monetary transaction of a subsidiary of TV Guide Inc.

According to Gemstar's announcement, KPMG has informed the company that it does not believe the information that had come to the audit committee's attention supports a change in the accounting treatment for this transaction. The firm also advised Gemstar that it will not be able to complete its SAS 71 review procedures until a final conclusion is reached regarding the restatement.

A KPMG spokesperson explained, "Whenever there is a dispute of this nature, we recommend that it be brought to the SEC's Office of Chief Accountant."

Gemstar is facing delisting for failure to meet the SEC's certification requirements. It was one of the 16 companies unable to certify to the accuracy of their companies' financial statements by the August 14, 2002 deadline set by the SEC.

-Rosemary Schlank

You may like these other stories...

Here's a CPA who truly walks the walk. On March 15, Frank Ryan, CPA, departed San Diego, California, with plans to be in Ocean City, Maryland, by July 2 to teach a course at the Maryland Association of CPAs’ (MACPA...
When Theodore J. Flynn first joined the Massachusetts Society of CPAs (MSCPA) in 1970, it was a different world and a different profession.  The "Big Eight" were still headquartered in Boston. Vietnam War...
Accountant Rickey Charles Goodrich had it a little too good. Many bean counters would kill to serve as financial guru to the likes of Pearl Jam. Goodrich was hired in 2005, and the following year, he became the CFO of Curtis...

Upcoming CPE Webinars

Jul 31
In this session Excel expert David Ringstrom helps beginners get up to speed in Microsoft Excel. However, even experienced Excel users will learn some new tricks, particularly when David discusses under-utilized aspects of Excel.
Aug 5
This webcast will focus on accounting and disclosure policies for various types of consolidations and business combinations.
Aug 20
In this session we'll review best practices for how to generate interest in your firm’s services.
Aug 21
Meet budgets and client expectations using project management skills geared toward the unique challenges faced by CPAs. Kristen Rampe will share how knowing the keys to structuring and executing a successful project can make the difference between success and repeated failures.