American car rental giant Hertz has delayed the posting of its second quarter results for the year, as it has announced that an internal accounting review is still ongoing.
According to Hertz Global Holdings, the review has so far found a number of errors going back at least the last three years.
The US firm, filing the announcement with the Securities and Exchange Commission (SEC) in the country, said it was not in a position to file its quarterly results on time.
The company went on to explain that an internal review into its financials was continuing. It said that results and findings of this would still be measurable against the Q2 results.
Claiming that to file on time would cause the firm an undue level of effort and expense, the filing by Hertz carried the CFO’s signature for the new man at the top, Thomas Kennedy.
No longer reliable
The errors in the accounts were first noticed by the firm earlier this year. As the accounting team at the company prepared the Q1 results for filing, the issue was highlighted. Having delayed that filing with the SEC too, the company also said that its financial statements for 2011 were no longer reliable.
The firm went on to say that corrections would also need to be made to its 2012-2013 figures, in light of the 2011 data being inaccurate.
The CEO-signed company statement said:
“As a result of the ongoing nature of this review and its potential impact on the company’s 2014 financial results, the company was unable to complete the quarterly report by the prescribed August 11, 2014 due date without undue effort and expense, and will be unable to file the quarterly report within the five-day extension provided.”
Affecting strategy and growth
The news of the issue is already having effect on the future strategic direction for the firm, showing why accurate bookkeeping is so important and offering a timely reminder to firms considering their options, with accounting services for small business in the UK in demand.
Due to the findings, Hertz has already pulled back on its stock-purchase scheme for staff. Industry experts and the media have also suggested it will slow down the plans of spinning-off its equipment leasing firm.
It is understood that the accounting errors are largely related to the total depreciation costs of some of Hertz’s non-fleet assets. Other issues are also thought to have been uncovered.