“Would you buy stock in a company that doesn’t regularly record its debits and credits? Or one that admits it lacks accounting skills? How about one that couldn’t account for some of its expenses? Apparently you would. About 30% of companies that went public last year acknowledged they were at serious risk of incorrectly reporting their financial information, according to a study by Proskauer Rose LLP. That’s up from 17% of issuers in 2013, the study shows. Yet investors weren’t bothered. The 32 companies — from GrubHub Inc. to GoPro Inc. — that reported material weaknesses in their accounting systems last year have surged an average of 42% since their stock debuts.”
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