March 19, 2006

Accounting missteps magnify GM's crisis

General Motors Corp. was hoping to address some issues by filing an annual report admitting questionable charges, understated losses and a litany of accounting errors dating back years. But at the last minute, with its Form 10-K about to be submitted to federal regulators, GM spotted yet another accounting problem -- it had misstated cash-flow levels at its General Motors Acceptance Corp. unit. GM\'s stunning decision Thursday night to delay its 2005 annual report to sort through the mess underscores the intense pressure brought on the company by an ongoing investigation of its finances by the U.S. Securities and Exchange Commission. \"They are going to dig through everybody on the supplier side,\" said Peter Henning, a Wayne State University law professor and former SEC attorney. \"It\'s really starting to stick out like a sore thumb to investigators.\"

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