Paint maker PPG Industries has fired its controller and reassigned employees after it found accounting errors mounting into the millions of dollars and said its investigation into alleged violations of its accounting policies continues.
PPG said that errors pertained to the first quarter and would result in a $7.8 million net decrease in income from continuing operations before taxes. Additional errors may be identified, the company said. The accounting problems were brought to the attention of PPG officials through an internal reporting hotline.
The company issued a statement on the accounting problems with its earnings release in late April: “Based on preliminary review, the company identified approximately $1.4 million of expense that should have been accrued in the first quarter, and the earnings reported in this release reflect the accrual of such $1.4 million of expenses. The report also alleges that there may have been other unspecified expenses, potentially up to $5 million in the aggregate, that were improperly not accrued in the first quarter. The Audit Committee of the company’s Board of Directors is overseeing an investigation of the matters set forth in the report, with the assistance of outside counsel. The company is currently unable to predict the timing or outcome of the investigation and will move with diligence.”