Restatement of Huron Consulting Group, Inc.: The Effect on Financial Statement and the Affect on Stockholders
Huron Consulting Group, Inc. provides business consulting services in diverse industries in regard to improving performance, complying with complex regulations, resolving disputes, recovering from distress, leveraging technology, and stimulating growth. On July 31, 2009, the Company made the announcement that it will restate its financial statements for the fiscal years 2006, 2007 and 2008 and the first quarter of 2009 due to the accounting of acquisition related payments discovered by the audit committee of the board of directors. Huron Consulting Group, Inc. through the acquisition of additional businesses involving accounting principals produced errors on their financial statements affecting not only the company but also the stockholders.
Restatement of the Company
Huron’s restatement is a result from “accounting related to four specific business acquisitions where (the) payments received by sellers were ‘subsequently redistributed among themselves and to other select Huron employees’” (Whitehouse, 2009). More specifically, Huron acquired four companies between 2005 and 2007. As part of the price paid, several former executives of the purchased firms, reallocated the “earn outs” or payments received over time “contingent upon achieving certain performance targets” among themselves and other employee(s) at Huron (Huron Press Release, 2009). Accounting Principals Involved
The principals involved in the actions leading up to the restatement are Gary E. Holdren, Gary L. Burge, and Wayne Lipski. Gary Holdren, CEO and chairman, started working with Huron in May 2002 as president of one of Huron Consulting group’s subsidiaries. Holdren holds a bachelors degree from Miami University, and a CPA license. He was a partner and midwest director of global client services at Arthur Andersen LLP from 1991 through 1998. Holdren has...
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