IPG has confirmed it will restate results dating back to 1997 after uncovering $68.5 million in charges which were not properly reported. The money relates to the way its McCann-Erickson network reported sales in Europe, but the holding company has decided to review its accounting practices and financial staff across the region.
The chief executive, John Dooner, said the charges had no impact on IPG's cash position, and announced operating profits of $238.5 million, down 1.3 per cent for the same quarterly period in 2001. IPG was due to release its results on 6 August but delayed until 13 August, which caused a 24 per cent drop in its share price.
IPG's decision comes as WPP pledged to certify its accounts for the year to December 2001 to the US Securities and Exchange Commission, even though the British holding company is not obliged to submit figures to the SEC.
WPP said it was important to comply in the light of new laws and best practice after the SEC asked the chief executives and chief financial officers of 947 companies to certify their financial statements by this week.
This week Publicis, the French rival to both holding companies, reported a 3.6 per cent drop in first-half like for like sales to £746 million as a result of the ongoing slump in advertising.