Financial Accounting Blog

Sunday, November 16, 2003

This article from discusses an alleged scheme by Gateway computer executives to artificially inflate the personal computer maker's revenue and profit in 2000. Investigators claim that Gateway failed to disclose significant company trends such as: Declining personal computer sales growth, the fact that only a small percentage of net income came from PC sales, and the fact that revenue and earnings included various one-time transactions. The allegations also state that Gateway contacted individuals whose credit applications had previously been denied by the company, and offered them pre-approved financing to facilitate sales.