Overstock.com, also known as O.co, with headquarters in Salt Lake City, Utah was founded in 1999 by Patrick S. Byrne, its CEO and Chairman of the Board of Directors. Byrne "recognized the potential in liquidating excess inventory through the Internet. Up until then, consumers had relied upon outlet centers with crowds and limited product selections for finding bargains, and small retailers found little access into the world of closeout merchandise" (O.co, 2010). Meantime, the art of online shopping seemed to be skyrocketing. In 1999 Overstock.com reported a "$1.8 million in annual revenue to over $1 billion in revenue in 2010. Overstock.com is a major online retailer offering a wide variety of high-quality, brand name merchandise, including bedding, home decor, appliances, watches, jewelry, electronics, sporting goods, clothing and shoes. They provide customers with convenient shopping while offering manufacturers, distributors and other retailers an alternative sales channel" (Commerceinterface, 2011). .But, were these figures correct? Let's take a closer look into the reports issued by Overstock.com.
OVERSTOCK.COM: UNUSUAL/CONFLICTING ACCOUNTING PRINCIPLES IMPACT
Overstock.com has recently received negative publicity because of some decisions regarding GAAP, internal accounting policies and their relationship with external auditors that has caused the company to have to restate their published financial statements going back to 2008. In their 2010 10K report on page 19 it is stated that "We lacked a sufficient number of accounting professionals with the necessary knowledge, experience and training to adequately account for and perform adequate supervisory reviews of significant transactions that resulted in misapplications of GAAP. Information technology program change and program development controls were inadequately designed to prevent changes in our accounting systems which led to the failure to appropriately capture and...
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