Big Blue faces financial probe by SEC
IBM saw shares fall overnight as news emerged that the Securities and Exchanges Commission (SEC) is investigating how it filed revenues for deals in the US, the UK and Ireland.
Shares fell 3pc overnight. IBM knew of the investigation in August but only disclosed it in a regulatory filing yesterday.
“In August 2015, IBM learned that the SEC is conducting an investigation relating to revenue recognition with respect to the accounting treatment of certain transactions in the US, UK and Ireland,” it said in the filing.
IBM said it is co-operating fully with the SEC in the matter.
The SEC has stepped up financial reporting as a key enforcement priority and is looking closely at how firms record revenues on their books, with a key emphasis on improper revenue recognition.
“IBM has a rigorous and disciplined process for the preparation of its financial statements and the reporting of revenue,” said Ian Colley, a spokesperson for IBM.
“We are confident that the results and the information we report have been appropriate and consistent with generally accepted accounting principles.”
