Just after market close on Friday July 31st, 2009, Huron Consulting Group dropped a bombshell on investors by announcing an intention to restate its 2006 to 2009 financial statements due to incorrect accounting of “non-cash charges relating to how payments received by the sellers of certain acquired businesses were subsequently redistributed among themselves and to other select Huron employees”. Shell shocked investors immediately sold HURN stock, causing the stock to fall by an astounding 70% from close of market on Friday at $45 to open at a paltry $12 per share at open of market on Monday August 3rd, 2009, and leading to an instant shareholder value disappearance of almost $700 million...
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5 comments:
Thanks for your analysis of the situation; how scary and painful for consultants; terribly ironic, given their business. Depending on client and prospect relations, Huron may be well served by a significant increase in transparency, and outreach through online social networking.
Good analysis...
Thanks..
Regards,
accounting services
You really have no idea what you are talking about in the article... Why don't you actually READ the 10-K/A and 10-Q/A to understand the accounting implications and how this WAS NOT A SCANDAL at all.
If you are a CPA and wrote the article above, I would question your knowledge about non-cash comp expense and how the transactions arose.
It's funny that people in the world go to "blogspots" and think these are factual research.... and not just ramblings.
We are responding to Anonymous - yes we did read the 10K and 10Q, this had no cash flow impact but owing to the incorrect accounting it did have an income statement impact. Huron did have to restate its historical financials in line with GAAP guidelines, and the stock did fall substantially, and the CEO and CFO did leave. In our mind, that's an accounting scandal, and the shocking aspect is that this consulting firm advises companies on systems and processes and risks.
Good analysis...
Thanks..
Regards,
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