comScore completes accounting probe, says adjustments required
comScore said in a regulatory filing that it completed its Audit Committee's investigation of certain potential accounting matters, and the company is providing the following summary of the findings of the Audit Committee and steps the company is taking in response to these findings. As a result of the February 19, 2016 message, the Audit Committee investigated the issues raised by the message and other matters related to the company's revenue recognition practices, disclosures, internal controls, corporate culture, and certain employment practices. The Audit Committee's investigation concluded that, as a result of certain instances of misconduct and errors in accounting determinations, adjustments to the company's accounting for certain nonmonetary and monetary transactions were required. Based on the results of the Audit Committee investigation, and as previously disclosed, the company cannot support the prior accounting for the nonmonetary transactions recorded by the company during the years ended December 31, 2013, 2014 and 2015, and accordingly, revenue and expenses associated with all nonmonetary transactions during these periods is being reversed and accounted for at historical cost rather than at fair value. There is no historical cost basis associated with the assets that the company exchanged and therefore there should be no revenue recognized or expenses incurred for those transactions. While a nonmonetary transaction inherently has no effect on operating income or cash flow over the life of the relevant agreement governing such transaction, the timing of revenue recognized relative to the related expense recognized may have an effect on a periodic basis. Based on its investigation, the Audit Committee also found that, for the nonmonetary transactions under review, facts collected during the investigation called aspects of the transactions into question, including instances where additional arrangements were entered into and not properly disclosed to the company's accounting group and instances where there did not appear to be a clear need for all of the data that was being exchanged. As previously disclosed, the company does not expect in the future to enter into any nonmonetary transactions that would result in the recognition of revenue. The company will continue with its improvements to internal controls and will continue to review transactions that were not part of the investigation. As a result of that review, there may be additional accounting adjustments and such adjustments may be material.