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10 September 2009
Volt Information Sciences Inc. announced yesterday that it will delay the release of its fiscal third-quarter results and its related regulatory filing while it reviews its revenue accounting from past years.
The company, which provides information technology staffing, outsourcing and telecoms/software services, said it is re-examining its accounting for a total of about $12 million of revenue reported in fiscal 2007 and fiscal 2008. In each of those years, Volt reported total revenue of $2.4 billion. "The company is assessing whether certain of these revenues and related costs should have been recorded in later periods," it announced.
Volt's third-quarter release and investor conference call were originally scheduled for Thursday and the company said it will also delay filing its required quarterly report with the Securities and Exchange Commission, which is due Friday.
In Europe, Volt provides staffing services in the UK, Belgium, France and Germany, and Telecoms/Software services, under the Volt Delta and VMC brands in the UK, Netherlands and Germany. The Company's VMS specialist, Procurestaff, has programmes in place throughout Europe.
In Volt's announcement, the Company stated that the accounting irregularity was related to AICPA Statements of Position 81-1 and 97-2 which define the performance of construction-type/production-type contracts and software revenue recognition respectively. Construction accounting requires unique revenue recognition rules for contracts in progress. Because most construction contracts by their nature are long-term, the underlying accounting principle known as "matching" would be violated if the revenue from the contract were recognised upon contract execution or sale of the services.
In its 2008 Annual report, Volt had disclosed that, as part of its evaluation of the effectiveness of the design and operation of internal controls, management had concluded that "disclosure controls and procedures are ineffective because of the effect of a material weakness in the Company's system of internal controls at one of the Company's subsidiaries".