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sticklegs
08-05-2005, 01:55 PM
anybody hear this story :D

http://www.kansascity.com/mld/kansascity/business/12283816.htm

I hope they don't do your taxes


Block reveals costly errors

By GENE MEYER

The Kansas City Star


H&R Block Inc. on Monday reported that a cluster of accounting errors led to about a $91 million overstatement of its combined profits for 2003 and 2004.

The Kansas City financial services provider warned investors in June that correcting the mistakes would require revision of some previously reported earnings by about 2 cents a share. But analysts and other observers generally expected a far smaller change than the shift of approximately 50 cents a share the company disclosed in a Securities and Exchange Commission filing issued Monday.

Block, which operates the world's largest income tax preparation network, said in the filing that fixing the accounting errors collectively reduced its previously reported 2003 profits by $102.4 million, to a total of $477.6 million. Its recalculated 2004 earnings increased by $11.4 million, to $709.2 million.

The changes also lifted the company's most recent 2005 fiscal-year earnings to $636 million, or $3.77 a share. That is about $1 million more and a penny a share higher than was reported in early June. Block ends its fiscal year April 30, just after peak income tax filing periods in the U.S. and Canada.

Block said in its filing that "material weakness" in some of its financial controls and "insufficient resources" to identify and report some complex transactions contributed to the errors.

"We believe that as of the filing, we have corrected those problems." Linda McDougall, the company's chief spokeswoman, said Monday.

Securities analysts who follow Block say that tighter financial reporting and disclosure standards under the Sarbanes-Oxley Act that followed the Enron and WorldCom accounting scandals make accounting disclosures like Block's more common. More than 360 U.S. companies have uncovered and reported broadly similar weaknesses in their accounting and financial controls since those scandals erupted, according to Bloomberg News.

"This doesn't appear to be a big deal," said Alexander Paris Jr., research director at Barrington Research in Chicago.

"The fact that some of the numbers increased and some decreased makes it easier to take management at its word that these were minor mistakes that weren't significant by themselves, but were significant when they were added up," Paris said.

Block stock closed at $56.60 a share, down 36 cents in New York Stock Exchange trading Monday.

The SEC filing indicated that much of the revision stemmed from errors made when Block accounted for its $850 million acquisition of Olde Financial Corp. in fiscal 2000. Block bought Olde and a number of smaller brokerage and financial services firms late in 1999 to form what now is its H&R Block Financial Advisors arm.

Block said that miscalculations of deferred taxes and amortization requirements when it bought Olde resulted in an additional $84.8 million nondeductible impairment charge for the investment services unit, plus a $1.7 million charge related to the acquisition of a business services unit, in 2003.

Block also understated some compensation expenses for mortgage services workers by about $12.1 million in 2004, the SEC report said.

Diesel66
08-05-2005, 02:05 PM
anybody here this story :D

http://www.kansascity.com/mld/kansascity/business/12283816.htm

I hope they don't do your taxes
can you post the article ?

H&R block are the fastfood of accounting, waste of money

sticklegs
08-05-2005, 02:16 PM
new link and story posted above ;)