Toy company Playmates Holdings may hire outside professionals to assist its audit committee following a row over accounting misconduct that led to the resignation of its former auditor, according to an executive director.
Aside from any outside hirings, Sidney To yesterday said the company would allocate additional staff, including experienced accountants, to help boost internal auditing and restore shareholder confidence.
His comments follow the resignation of PricewaterhouseCoopers late last year after it had found a 2004 'accounting oversight' by Playmates Toys, a principal Playmates Holdings subsidiary incorporated in California.
'The problem is small. This can be shown by the fact that we are able to find another auditor to produce last year's annual results without any amendment,' Mr To said after announcing the group's net profit fell 23 per cent to $195.99 million for last year.
Mr To stressed that the accounting oversight, which resulted in a US$411,000 decrease in revenue, had not affected the group's operation. It involved the over-provisioning for potential customer claims of mark-down allowances due to unsold goods and incorrect recognition of revenue on sales of goods on freight pre-paid terms.
The company's new auditors are Moores Rowland Mazars.
Mr To said PricewaterhouseCoopers' resignation had caused 'inconvenience' to the group because it was preparing its annual results.
