GM to Investors: Internal financial reporting controls are ineffective

Filed under: Government/Legal, GM, Earnings/Financials

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Now that General Motors has submitted the necessary paperwork for its IPO to the SEC, Forbes read through the entire 734 page filing and found this curious tidbit: “We have determined that our disclosure controls and procedures and our internal control over financial reporting are currently not effective.” And yes, that means exactly what you think it means.

In case you think it’s only cautious puffery, the document goes on to say, “Until we have been able to test the operating effectiveness of remediated internal controls and ensure the effectiveness of our disclosure controls and procedures, any material weaknesses may materially adversely affect our ability to report accurately our financial condition and results of operations in the future in a timely and reliable manner.”

And there’s more, but the gist is that GM wants you to know that it might have to shuffle some of its past numbers at some future date. The problem seems to go back to early last year, when new accounting procedures were put in place to please the SEC. The General’s trip to Narnia bankruptcy and back, however, prevented it from fully vetting those procedures, so it can’t be 100% certain that they’re 100% accurate. It could actually just be caution on GM’s part, but nevertheless, some funny things are happening on the way to this IPO…

[Source: Forbes]

GM to Investors: Internal financial reporting controls are ineffective originally appeared on Autoblog on Sun, 22 Aug 2010 16:33:00 EST. Please see our terms for use of feeds.

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