Looks like someone was cooking the books at International Rectifier (NYSE:IRF). Back in April, the company disclosed that it had found financial irregularities at a foreign subsidiary involving “among other things, premature revenue recognition of product sales.”
On Friday, the company filed an update with the SEC, and things now appear even worse than originally described.
The company now says that it found that it was the practice at the foreign subsidiary -
where from time to time certain unsubstantiated orders were entered. These orders resulted in the shipment of products and the recording of sales with no obligation by customers to receive and pay for the products. The practice included routing certain product shipments to warehouses not on the Company’s logistical systems.
The company also said that “a significant increase in the reported sales by that subsidiary during the quarters ended March 31, 2005 and June 30, 2005 may have resulted” from those practices; the audit committee at International Rectifier found that “material weaknesses in internal control over financial accounting existed for those quarters and for the fiscal year ended June 30, 2005.” Gee, ya think?
Oh, and the investigation rolls on. This smells a little like Miniscribe; let’s hope it has a better ending.
Monday, International Rectifier was down $1.35 at $35.72.