Insight Enterprises
Encyclopedia
Insight Enterprises, Inc. headquartered in Tempe, Arizona
, is an information technology
outsourcing
business. It was incorporated in 1991 in Delaware
. The company has more than 5,100 employees worldwide and is ranked number 471 on Fortune magazine’s 2011 Fortune 1000
list.
The trade credits in question came about from unclaimed credit memos, duplicate payments, payments for returned products or overpayments made by the clients of Insight, and goods received from suppliers that were never invoiced.
The cumulative effect of the restatement as disclosed by Insight is $61.2 million, or $37.7 million after taxes. The liabilities relating to the aged trade credits amount to a total of $59.4 million. On March 24, 2009, a class action lawsuit was filed against Insight Enterprises for allegedly filing false and material misstatement financial statements because Insight Enterprise’s former chief financial offer, Stanley Labourne, and CEO, Richard Fennessy, misstated the financial statements due to the improper accounting treatment of trade credits. Furthermore, Insight Enterprise’s senior management failed to prepare the financial statements in accordance with GAAP, and the company lacked proper internal financial controls resulting in financial statements that were materially false and misleading to their users.
On May 12, 2009, Insight reported their results of operations for the quarter ended March 31, 2009 and reported the completion of the previously announced restatement of our historical financial statements related to aged trade credits. Accordingly, all prior period financial statement information in the release has been restated. Insight provided a tabular reconciliation of financial measures prepared in accordance with United States generally accepted accounting principles (“GAAP”) to non-GAAP financial measures included at the end of their Q1 2009 results press release. “We are very pleased to have the restatement process and investigation behind us, and while we expect the balance of 2009 to continue to be challenging, we believe we have the right business model, the right teammates and a strong balance sheet that will position us well throughout the balance of 2009 and into 2010,” stated Rich Fennessy, President and Chief Executive Officer of Insight.
Tempe, Arizona
Tempe is a city in Maricopa County, Arizona, USA, with the Census Bureau reporting a 2010 population of 161,719. The city is named after the Vale of Tempe in Greece. Tempe is located in the East Valley section of metropolitan Phoenix; it is bordered by Phoenix and Guadalupe on the west, Scottsdale...
, is an information technology
Information technology
Information technology is the acquisition, processing, storage and dissemination of vocal, pictorial, textual and numerical information by a microelectronics-based combination of computing and telecommunications...
outsourcing
Outsourcing
Outsourcing is the process of contracting a business function to someone else.-Overview:The term outsourcing is used inconsistently but usually involves the contracting out of a business function - commonly one previously performed in-house - to an external provider...
business. It was incorporated in 1991 in Delaware
Delaware
Delaware is a U.S. state located on the Atlantic Coast in the Mid-Atlantic region of the United States. It is bordered to the south and west by Maryland, and to the north by Pennsylvania...
. The company has more than 5,100 employees worldwide and is ranked number 471 on Fortune magazine’s 2011 Fortune 1000
Fortune 1000
Fortune 1000 is a reference to a list maintained by the American business magazine Fortune. The list is of the 1000 largest American companies, ranked on revenues alone...
list.
2009 Accounting Restatement
In February 2009, the company disclosed a restatement of earnings from 2008 to 1996. The restatement amended an accounting error related to aged trade credit liabilities. The error was discovered by an internal review of the accounting systems, and the audit committee decided the aged trade credits were recognized from the balance sheet to the income statement before the underlying legal liabilities had been settled.The trade credits in question came about from unclaimed credit memos, duplicate payments, payments for returned products or overpayments made by the clients of Insight, and goods received from suppliers that were never invoiced.
The cumulative effect of the restatement as disclosed by Insight is $61.2 million, or $37.7 million after taxes. The liabilities relating to the aged trade credits amount to a total of $59.4 million. On March 24, 2009, a class action lawsuit was filed against Insight Enterprises for allegedly filing false and material misstatement financial statements because Insight Enterprise’s former chief financial offer, Stanley Labourne, and CEO, Richard Fennessy, misstated the financial statements due to the improper accounting treatment of trade credits. Furthermore, Insight Enterprise’s senior management failed to prepare the financial statements in accordance with GAAP, and the company lacked proper internal financial controls resulting in financial statements that were materially false and misleading to their users.
Insight Completes 2009 Accounting Restatement
In May of 2009, Insight issued a press release announcing that it has completed its investigation into its historical accounting for aged trade credits and would file its report on Form 10-K for the year ended December 31, 2008, on May 11, 2009. In addition, the Company would report its operating results for the quarter ended March 31, 2009, before the market opens on May 12, 2009.On May 12, 2009, Insight reported their results of operations for the quarter ended March 31, 2009 and reported the completion of the previously announced restatement of our historical financial statements related to aged trade credits. Accordingly, all prior period financial statement information in the release has been restated. Insight provided a tabular reconciliation of financial measures prepared in accordance with United States generally accepted accounting principles (“GAAP”) to non-GAAP financial measures included at the end of their Q1 2009 results press release. “We are very pleased to have the restatement process and investigation behind us, and while we expect the balance of 2009 to continue to be challenging, we believe we have the right business model, the right teammates and a strong balance sheet that will position us well throughout the balance of 2009 and into 2010,” stated Rich Fennessy, President and Chief Executive Officer of Insight.