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Conduent Takes Three Years to Correct $7 Million Revenue Overstatement
Contractor never generated certain sales it reported in as many as twelve consecutive quarters.
February 22, 2024
Conduent Incorporated (CNDT), a business process services provider, identified an error and recorded an out-of-period adjustment to correct the recognition of revenue on a government contract that originated in 2020 and impacted all quarterly periods through December 31, 2022.
The company reported millions of dollars in revenue it never actually generated, corrected the error during the first quarter of 2023, and quantified it in ts latest annual report:
“This adjustment resulted in a reduction to revenue and income (loss) before income taxes of $7 million and a corresponding decrease to accounts receivable of $1 million and an increase to other current liabilities of $6 million in the first quarter of 2023.”
The $7 million overstatement is the equivalent of:
—2.4% of cumulative Operating Income between 2020-2022
—0.7% of revenue in the quarter the correction was made
—87.5% of Operating Income in the quarter the correction was made
Conduent says the error is immaterial and thus will not restate inaccurate previously filed financial statements.
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