The cost of Groupon’s incompetence
On Friday evening, Groupon revised their very first earnings report to the SEC, reporting that the company’s revenue was actually 3% lower than initially reported, increasing losses by $22.6 million. In the 10-K filed yesterday with the SEC, they admitted to having a “material weakness” in their financial reporting structures:
[…] Management concluded as of December 31, 2011 that our disclosure controls and procedures were not effective at the reasonable assurance level due to a material weakness in our internal control over financial reporting […]
This is actually the second time Groupon has had to revise its earnings; after their S-1 (the IPO prospectus) was first filed with bizarre accounting procedures, the company was forced to make considerable revisions.
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