NEW YORK, Thu Apr 12, 2012 – Groupon Inc., the online coupon company that floated just months ago in the strongest IPO in years, has had recurring accounting problems that critics say show a need for more financial sophistication on its board.
Groupon revised its fourth-quarter results last month, its first results posted as a public company, trimming revenue by $14.3 million. The company also said it found a material weakness in controls over its financial statements.
Fast-growing Groupon has said the latest accounting problems stemmed from a move into higher priced coupons, which led to more customer returns and refunds than anticipated.
The company sells discounted coupons online, keeping part of the money that customers pay for the coupons, with the rest going to participating merchants.
Groupon has asked an external auditor to look into the causes of its internal control weakness and has said it will beef up its own finance staff.
But corporate governance experts questioned the financial background of the Groupon board’s audit committee, which is supposed to oversee both its auditor and the company’s own accountants.
Groupon spokesman Paul Taaffe said the audit committee has met regularly to address accounting issues since the company discovered in February that the refund rate had increased.
Committee members “were in contact with each other, the audit firm and management continuously,” he said.
Members of the audit committee declined comment.