M&C Saatchi shares tumble on accounting irregularity
Shares in M&C Saatchi hit a near five-year low yesterday as the company warned that "incorrect accounting" could cost it £6.4 million.
The Times reports that the group said it had misrecorded some of its revenues, and that it had included on its balance sheet some assets that it no longer used.
M&C Saatchi began investigating its own accounting practices following reports of concerns from its auditor KPMG. It says it is now ready to commission an additional independent review.
The review is expected to be completed by November.
The group said it expected its annual results to take a £6.4 million hit, including a £1.5 million contingency to cover any additional errors that have not yet been discovered.
M&C Saatchi said: “We believe we have discovered the full extent of the issues, but, to be doubly sure, the board is appointing independent advisers to undertake a review of all the group’s accounts and accounting systems, as well as setting aside an extra £1.5 million as a conservative measure to provide for any potential further items arising."
Its shares fell on the Aim market to 257 pence, a drop of 82 pence.