Marvell says audit committee investigation finds no accounting fraud

Marvell said on Tuesday that an independent enquiry of its accounting found no fraud in the way it booked its revenues. However, it claimed that Marvell's internal controls were not fully followed and that the company's revenue was premature for some transactions.

According to Reuters, the Chipmaker Marvell Technology Group Ltd claimed that an investigation searched no deceitful ways in the company's booked revenues. However, the company noted that there was a "significant pressure" from the management on sales team to meet the targeted revenues.

Marvell's shares boosted up as much as 4.2% in value following the six-month enquiry found no evidence of deceptive acts within the company. But still, the committee's conclusion raised a lot of questions about the management's operating method. This is an issue pointed out by PriceWaterhouseCoopers in October when it resigned as Marvell's auditor.

However, the investigating body also found out that Marvell's internal controls were not fully followed. The committee also claimed that the revenue of the company was acknowledged in advance for a few of the transactions made. The Chipmaker company had been searching out for the details of its revenue recognition strategies for the first and second quarters of 2016 and the fourth quarter of 2015, as reported by CNBC.

The committee also stated that there was a "significant pressure" on the company's sales and finance employees to meet revenue targets. They also raised some questions regarding a patent that the CEO had initially claimed as his before passing onto the company.

Marvell revealed just last year that it was investigating its revenue recognition practices in the recent quarters. The company claimed that it was assessing whether any of the errors were previously made. The company also disclosed that if there are errors found, it would shift the revenue forward one quarter, as claimed by The Times of India.

Meanwhile, since the accounting probe was announced in September, the company's value had followed some downfall for 9.5%. But the company's shares were all up 2.4% at $9.78 on Tuesday morning.

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