Interpublic Accounting Irregularities – Worse to Come?

11 November 2002

Interpublic Group, due to unveil its third quarter earnings on Wednesday, is also set to reveal unpleasant news about the extent of accounting irregularities at its largest agency network McCann-Erickson World Group [WAMN: 18-Oct-02].

First reported in August, these centered around McCann’s European operations, where bookkeeping inconsistencies forced Interpublic to restate five years of earnings and take a $68.5 million pretax charge.

Then last month IPG admitted that the continuing investigation had necessitated upward adjustments, raising the McCann charge to a figure “not expected to exceed $120 million”.

But, according to Monday’s New York Times, this figure is expected to get worse. The speculation follows more recent news [WAMN: 24-Oct-02] that McCann is to lose its chief financial officer and vice chairman Salvatore LaGreca (49) who plans to take [unusually] early retirement.

Meantime, with an announcement due Wednesday, lips at the beleaguered holding company remain firmly zipped.

Data sourced from: New York Times; additional content by WARC staff