No, that's wrong. An auditor is much more concerned about a...

No, that's wrong. An auditor is much more concerned about a company that under-reports than one that over reports. Under-reporting implies under taxation and that is a line most auditors won't want to cross.

The company is having to deal with big write-offs of goodwill, counterbalanced against debt covenant issues, and there should not be any surprise that the auditors and the CFO would have differences of opinion on how to state these, levels of impairment, etc.

I think more concerning to me is that they didn't plan well to meet this deadline, and apparently they didn't under-estimate their actual results enough. It would have been better to over-shock the market once, then over deliver the actual result. It looks like this is going to be an ugly year for this company, although I still come back to the idea that the basic business model and brands can be made right after one-time adjustments are made. Even if we impair the earnings enormously, once we clear out the inventory of unsold franchises and show a stable trend of any level of growth, the stock seems to be valued far below its historical mean PE ratio (against the impaired earnings).