Adecco: Accounting Scandal or a Communication Problem?
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Code : GOV0003
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Region : USA Europe |
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Background Adia was founded in 1957 in Switzerland. Its main business was personnel services. It expanded into Europe in the 1960s and US in 1972. It had offices inmost of the countries of South East Asia including Japan and Australia by 1990s. Ecco, on the other hand, was established in France in 1964. It started as a small temporary staffing company and by 1984, it became the largest staffing company with a global presence. Ecco was the second largest personnel service in Europe andAdia was the fifth... The Scandal On January 12th 2004, Adecco announced that it was delaying its annual results of 2003, citing “material weaknesses identified in the internal controls” in its NorthAmerican unit. The results, which were to be released on February 4, were delayed indefinitely. This announcement came as a shock to investors and the situation was made even worse with Adecco choosing to remain tight-lipped about the details. The company said that its internal controls over operations in NorthAmerican unit acquired by Olsten was being revised... |
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Public Relations Blunder Adecco was constantly modifying its press reports, confusing the already confounded investors. Since January 12th 2004, itmade twomodifications to its reports to convey to the investors that there was no accounting scandal but only irregularities in billing. Analysts criticized Adecco for lack of proper public relations policy. They felt that the cost of restatements of accounts would not be really huge compared to the reputation at stake...
