Groupon restates earnings after finding “weakness” in accounting controls

Groupon(s grpn) was forced to restate earnings results for its first quarter as a public company after discovering “material weakness” in its accounting controls, it said late Friday, forcing us to wonder if they used a Groupon for accounting services.
Of course, it was actually the august accounting firm of Ernst & Young that discovered the “material weakness” in Groupon’s accounting policies, and they probably don’t run half-off sales. Groupon said it understated operating expenses during its fourth quarter, turning a reported operating income of $15 million into an operating loss of $15 million. The company now says it recorded a net loss of $65.4 million instead of the $42.7 million net loss it reported in February.
The company told AllThingsD that it saw a greater-than-expected return rate on high-end Groupons involving things like Lasik eye surgery, which is probably another thing that one shouldn’t purchase at a discount. Groupon said it isn’t changing its guidance for the current quarter, which is a good thing, but investors weren’t pleased with the news: the company’s stock fell 6.7 percent in after-hours trading. It doesn’t help that this isn’t the first time Groupon’s accounting policies have been called into question, following its decision to use a head-scratching accounting metric called “adjusted consolidated segment operating income” as a primary selling point for its IPO.