Following an internal audit, the company stated that its results for 2011 which were amended in its most recent annual report “should no longer be relied upon.”

Hertz

In addition to its accounting woes, Hertz Global Holdings, Inc. (NYSE:HTZ) said that its first quarter results which are delayed due to the accounting snafu will also come in below analysts’ expectations. This statement caused Hertz shares to tumble about 10% in early morning trading today.

Presently (12:28PM EDT), the stock is trading at $27.71 down $2.78 or 9.12% after gaining back a bit.

Restatement of 2011, REVIEW of 2012 and 2013

The financial statement for both 2012 and 2013, will need to be reviewed in order to ensure the errors made in 2011 don’t warrant further restatements.  The company is hoping that the errors made in 2011, wont require further restatement not affect 2014 when the company begins its quarterly filings.

“It will take time to complete this process, and previously reported information is likely to change, although the actual size of any adjustments has yet to be determined and some adjustments may offset others,” the company said in its filing with the U.S. Securities and Exchange Commission.

In Hertz Global Holdings, Inc. (NYSE:HTZ)’s defense, the new CFO who came in at the end of 2013 has done a decent job righting the ship and is right to delay Q1 earnings until “at least one material weakness” in the company’s financial reporting is fixed.

The company said it is continuing a review that began when it was preparing its first-quarter report. The review “recently identified other errors related to allowances for uncollectable amounts with respect to renter obligations for damaged vehicles and restoration obligations at the end of facility leases,” Hertz said.

Who is to blame?

Charles K. Whitehead, a Cornell University professor who specializes in corporate and financial law wonders who is at fault, Hertz Global Holdings, Inc. (NYSE:HTZ) or PriceWaterhouseCoopers LLP.

“The real question is whether Hertz’s managers and PwC reasonably should have been aware of the problems earlier, and how those problems were discovered,” Mr. Whitehead said. “Were they uncovered by Hertz and brought to PwC’s attention, or did PwC’s review—and potential change of opinion—prompt Hertz Global Holdings, Inc. (NYSE:HTZ) to get ahead of the problem?”

That’s the question and it needs to be answered sooner rather than later for the sake of the company’s stockholders.

CORRECTION: When this story was first published this morning I wrongly stated on two occasions that the company was restating results for 2011, 2012 and 2013. After a conversation with a representative from Hertz and further review of the SEC filing, the company is restating 2011 and reviewing 2012, 2013. Following the review of those two years the company will determine whether further restatement is in order. My apologies to both the company, its investors and our readers — Brendan Byrne.