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Dublin: 8 °C Monday 16 September, 2019

IBM under the spotlight of US authorities for 'certain transactions' in Ireland

The company revealed the probe in its latest filings.

Best when together Source: Esteban Maringolo

COMPUTING GIANT IBM has revealed that US regulators are investigating its accounting procedures in territories including Ireland.

In a one-line addition to its latest filings for authorities, the company had this note:

In August 2015, IBM learned that the SEC (US Securities and Exchange Commission) is conducting an investigation relating to revenue recognition with respect to the accounting treatment of certain transactions in the US, UK and Ireland. The company is cooperating with the SEC in this matter.”

It is not clear what kind of transactions the probe involves and the SEC has declined to provide extra information.

IBM said it has a “rigorous and disciplined process” for preparing financial statements and reporting revenue and it was cooperating with the investigation.

In 2013 the SEC launched a probe into how the company reported sales from its cloud-computing business, but the investigation ended without any sanctions against the firm.

Clinton Global Initiative IBM chairwoman and CEO Ginni Rometty Source: AP Photo/Mark Lennihan

Finger pointing

IBM opened its first office in Ireland over five decades ago and now employs over 3,000 people in the Republic across campuses in Dublin and labs in Cork and Galway.

Like many other multinationals, it has had the finger pointed at it for using aggressive tax-minimisation schemes to slice its bills on offshore profits to historic lows.

However it has been a Dutch subsidiary of the company, rather than the Irish arms of firms like Apple, that has been involved in those moves.

Revenues at IBM have been sliding over recent years, although that hasn’t stopped it delivering an improving bottom line. Net income at the company was $8.7 billion (€7.9 billion) over the past 9 months – up from $6.5 billion a year earlier.

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Peter Bodkin  / Editor, Fora

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