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Pinnacle Micro Edges Up After Accounting Gaffe

November 17, 1994|GREG JOHNSON | TIMES STAFF WRITER

IRVINE — Pinnacle Micro's common stock rebounded slightly Wednesday, gaining 25 cents a share to close at $12 in Nasdaq trading.

Earlier in the week, the Irvine-based optical-disk manufacturer's stock dropped by more than 20% to $11.75 a share after the company provided additional details about previously reported accounting irregularities.

The newest information was released by an audit committee that includes the company's board members, legal counsel and a team of auditors. In July, the committee began to review shipping and accounting records after the board learned that some sales recorded in 1993 were not actually shipped until 1994.

The review disclosed that some employees "knowingly adopted or utilized improper procedures" while recording shipments. But the audit committee "was unable to resolve conflicting evidence as to whether or not current members of senior management authorized or were aware of the use" of improper record-keeping.

Pinnacle's board has reorganized the company's finance department and asked outside auditors to conduct quarterly reviews of financial statements.

Bill Blum, Pinnacle's president and chief executive officer, on Wednesday linked the accounting problems to the company's rapid growth.

"As a result," he said, "certain appropriate sales and shipping procedures were not in place."

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