Huron Consulting Group Case Study

900 Words 4 Pages
Register to read the introduction… In short, the actions of the employees receiving the “earn-out” payments and redistributing them to another turned the redistribution into compensation paid by the company, and hence, a material change in the reporting of expenses, with a corresponding impact of a reduction of $56 million to net income and EBITDA. The newly classified payments need to be accounted for as non-cash compensation expense of the Company with “corresponding increase to additional paid-in capital.”(Huron Press Release, 2009). This restatement however, did not affect Huron’s cash flow from operations, or affect the assets, liabilities or stockholder’s equity …show more content…
The price of the company’s stock also fell. Prior to the discovery, Huron’s stock had reached an artificially inflated price of $83.25 per share and fell to a low of $13.69 per share after the restatement announcement, the unrelated SEC inquiry and the resignation of the company’s CEO, CFO, and CAO. The stock’s decline in value relating to these events triggered other issues and pending liabilities for the company. Persons who purchased or otherwise acquired the common stock of Huron between April 27, 2006 and July 31, 2009, filed a class action lawsuit against Huron and certain officers for violations of the Securities Exchange Act of 1934. Conclusion “No business, large or small, is immune from errors” (Keiso, Weygandt, & Warfield, 2007, p. 1166). Huron Consulting Group Inc. is no exception. Unfortunately, the experience of Huron’s Accounting and Financial Consulting segment, which helps its clients with accounting and financial reporting matters, financial analysis in business disputes, international arbitration and litigation as well as valuation analysis related to business acquisitions did not provide them with immunity from errors that resulted in the

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