Sunrise Senior Living Discovers Accounting Errors but No Wrongdoing in Probe

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Sunrise Senior Finds Accounting Errors
Sunrise Senior Living Discovers Accounting Errors but No Wrongdoing in Probe
October 01, 2007: 09:19 AM EST
NEW YORK (Associated Press) – Sunrise Senior Living Inc. said Monday it made several accounting errors over the years but found no evidence of stock backdating, inappropriate accounting or insider trading as part of an internal investigation.

The company’s board of directors established an independent committee to review certain allegations made by the Service Employees International Union in December. The allegations included backdating and questions about the sale of stock by certain directors in the months prior to the company’s May 2006 announcement of its accounting review.

Shares of the company’s stock dipped in May of 2006 after the announcement that proposed Medicare cuts could trim its annual revenue and that it would delay its first-quarter earnings release.

The company said “erroneous judgments” on how to account for sale of real estate was the cause of a problem with accounting for commitments on the timing of sales of certain ventures. Also, “errors” were made in the pricing of stock option grants and the company is in the process of determining the amount of the expense in restatements.

Sunrise Senior Living said the investigation will continue concerning other restatement items, such as accruals and reserves. The investigation is expected to be complete by Dec. 15.

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