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The number of large U.S. companies missing annual report deadlines has soared this year, leaving investors in the dark as executives and auditors grapple with accounting problems and weaknesses in financial controls. ing.
The annual rush to approve financial statements has exposed problems at companies ranging from chemical giant Chemours to toymaker Mattel this week.
Teflon maker Chemours on Thursday placed its chief executive officer and two top finance executives on leave as the company investigates financial practices that may have affected executive bonuses.
Agricultural products group Archer Daniels Midland, which put its chief financial officer on leave in January to investigate accounting practices in its food ingredients business, said on Friday it would take another two weeks to finalize audited figures for 2023. He said it was possible.
Meanwhile, New York Community Bancorp's stock price rose to 4.3% on Friday after the community lender announced it had discovered material weaknesses in internal controls that guide loan reviews and postponed the release of its annual report. It fell by a factor of 1.
Toy company Mattel said Thursday it also found weaknesses in its internal controls over financial reporting and said it would take more time to release its annual report.
So far this year, 16 companies with market capitalizations of more than $1 billion have said they will miss the annual report filing deadline, which is 60 days after the end of a large company's fiscal year, according to data provider AlphaSense. This is almost double the number from last year, when nine companies said they needed additional time.
Auditors at large U.S. companies must approve not only the annual numbers themselves, but also the internal controls and systems the companies used to create them. Regulators require investors to be prominently notified of these control weaknesses.
Chemours identified “one or more” potentially material weaknesses in its internal controls, as well as a range of issues including how whistleblower complaints were handled and whether senior management was setting the appropriate “tone at the top.” He said he was investigating.
In addition to Chief Executive Officer Mark Newman, the company has placed Chief Financial Officer Jonathan Locke and Controller Camella Weisel on leave.
Chemours, which was spun off from DuPont in 2015, said it is examining how working capital is managed and how that impacts the financial metrics underlying executive bonuses. The company's shares fell 32% on Thursday, wiping $1.4 billion off its market capitalization. The stock rose 5.6% on Friday, but remains 28% below its pre-news level.
