Groupon announced that KPMG’s audit partner, Brian Stevens, will replace Joel Del Preto as Chied Accounting Officer and will report directly to Chief Financial Officer JasonChild. As for Del Preto, he will continue to operate in his role as VP and Global Controller, reporting to Stevens.
Back in April, Groupon hired accounting firm KPMG, in addition to their current accountant Ernst & Young, to help them achieve Sarbanes-Oxley Act compliance. They were under investigation from the Securities and Exchange Commission after they made last minute adjustments to their 10K filing, as Del Preto informed Child that they recorded the highest number of refunded coupons but didn’t have sufficient funds to cover the chargebacks.
Groupon offers users the Groupon Promise, which allows customers to return one of their coupons to be refunded for the purchase. Unfortunately, a lot of people returned the coupons back in January. Child formed a team that analyzed why the coupons were returned, raising concern over customer satisfaction. Fortunately for them, the returned coupons reflected that expensive deals were the ones being returned, and not coupons in general.
Groupon’s run-in with the SEC in April wasn’t the first. Last year, the SEC questioned Groupon as to why they used the $1.1 billion funding they raised in redeeming shares of their common and preferred stock, with the rest of the funding for acquisitions, working capital and general corporate purposes. They also want to uncover the reasons behind the inconsistencies in their reports.
An executive-level change means that Groupon is addressing the issue with new perspective and leadership, taking in one of its external partners to bring more accountability to their firm. Groupon’s been struggling with its brand even since before going public, and things haven’t gotten better since their milestone IPO.
Here’s hoping the change will stop investors from making a beeline for the exits.