Hertz Accounting Practices Questioned
Hertz Global Holdings Inc.’s Audit Committee of the Board of Directors has found that the financial statements for 2011 can no longer be used and must be restated. In addition, Hertz needs to fix the 2012 and 2013 statements to reflect these errors.
Hertz Global Holdings Inc.’s Audit Committee of the Board of Directors has found that the financial statements for 2011 can no longer be used and must be restated. In addition, Hertz also must fix the 2012 and 2013 financial statements to reflect these errors.
“The Audit Committee has directed the company to conduct a thorough review of the financial records for fiscal years 2011, 2012 and 2013, and this review may require Hertz to make further adjustments to the 2012 and 2013 financial statements,” Hertz said in a Securities & Exchange Commission filing. “If these further adjustments to the 2012 and 2013 financial statements are determined to be material adjustments individually or in the aggregate, Hertz will need to also restate and withdraw reliance on those financial statements.”
While preparing for the first quarter 2014 report, Hertz identified certain errors from 2011, which refer to charges for certain non-fleet assets, allowances for doubtful accounts in Brazil and other items, Hertz stated in its press release from May 13.
The 2011 financial statements were used in the Form 10-K for the period ending Dec. 31, 2013, according to the SEC filing. Now Hertz will need to modify the 10-K to correct the identified errors. As a result, this will delay Hertz’s filing of its First Quarter Form 10-Q and the first quarter earnings release again, which had been previously postponed from May to June 9.
In addition, “the Audit Committee has determined that at least one material weakness existed in Hertz’s internal control over financial reporting and that disclosure controls and procedures were ineffective,” Hertz stated in the SEC filing.
According to Hertz, it’s in the process of applying new procedures and controls as well as strengthening its accounting and finance departments through the addition of new personnel. Thomas C. Kennedy, the senior executive vice president and chief financial officer, will lead this process.
After announcing the accounting errors today, Hertz’s shares decreased more than 9% in trading to $27.19, according to NASDAQ.
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