Thursday, February 23, 2006

ProQuest Admits False Accounting

Found on Librarian in Black

From: Library Journal

ProQuest Company, February 9 revealed internal accounting errors that will result in it restating "certain of its previously issued financial statements." To defuse any fears of scandal like the one involving subscription agent, divine, Inc., ProQuest president Alan Aldsworth staged a conference call in which he assured that the errors do not "affect amount invoiced to customers, cash received from customers, or disbursements made to publishers and suppliers." ProQuest wasn't fielding questions from the press, but issued a statement in part reading: "Based upon its initial finding, the company believes that its deferred income and accrued royalty accounts are materially understated in previously issued financial statements. It also believes that its prepaid royalty account is materially overstated…as a result it will be required to recognize amounts of royalty and other expenses as well as reduce a portion of revenues previously reported for its Information and Learning business, the effect of which will materially reduce earnings from continuing operations…."

ProQuest added that the "irregularities do not affect the company's cash balances." The company has retained an outside accounting firm to conduct a thorough examination of its finances. Although lawyers for investors are preparing litigation, they confirm that neither customers nor suppliers were overcharged or cheated in any way.

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