So, the will-they-or-won’t-they Zynga IPO is in the news this week, with analysts all abuzz due to the company’s decision to restate its first quarter financials.
The cause? Zynga says it found a material weakness in internal controls over financial reporting. Kind of a big deal when you’re working to convince the whole investing world just how valuable your company is.
The restatement was a big one, bringing first-quarter profit figures from nearly $17 million down to just below $12 million.
Zynga says in its latest filing that it believes changes to its accounting policy have since fixed the identified weakness, and we’ll admit that they’re at least talking a good game on this one:
“If we are unable to maintain adequate internal controls for financial reporting in the future, or if our auditors are unable to express an opinion as to the effectiveness of our internal controls…investor confidence in the accuracy of our financial reports may be impacted or the market price of our Class A common stock could be negatively impacted.”
Not to beat a dead horse here, but we’ve heard shareholders (and would-be investors) really like when businesses can demonstrate robust internal controls – and real-time processes for monitoring them.
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