Tired of reruns?

chaps.jpgIt’s August and by now, we’re used to reruns on the tube. But reruns on accounting issues? That’s another story. On Monday, Warnaco (WRNC) reported second quarter earnings, that while 45% lower than second quarter 2005 earnings, prompted the stock to pop on Tuesday. Twenty four hours later, the company filed its Q, which noted almost in passing — well, footnote 15 — that accounting irregularities at its Chaps menswear division that the company had first disclosed a week earlier, had led to an informal investigation by the SEC. In both the Q and the Aug. 8 statement, the company talked about the problem being related to "certain returns and customer allowances". That’s accounting-speak for the stuff left behind on the markdown rack.

While it’s true that informal investigations are pretty common when a company discloses that its’ financial statements — including audited statements — can no longer be relied upon — as Warnaco did on Aug. 8, you have to think twice when issues like this come up at the same company over again. After all, it was just two years ago when former Warnaco Chairman and CEO Linda Wachner reached a $1.4 million settlement with the SEC over unusual accounting.

Reruns of Law & Order or CSI are one thing. Even Desperate Housewives aren’t too bad reheated. But recurring accounting issues get pretty boring pretty quickly!