Engineering and Construction Firm Fluor Settles $14.5 Million Accounting Charges

Engineering and construction company Fluor has reached a settlement agreement worth $14.5 million, following charges of accounting violations related to two major projects. The Securities and Exchange Commission (SEC) announced on Wednesday that Fluor had submitted bids for these projects based on overly optimistic estimates regarding costs and timelines. As a result, the company incurred substantial cost overruns and failed to maintain proper internal controls in compliance with U.S. accounting standards.

According to the SEC, Fluor neglected to include all projected costs that should have been accounted for in its forecasts for each project. In 2020, the company restated its financial statements for fiscal years 2016 to 2018, as well as several quarters in 2018 and 2019, in order to rectify its previously overstated earnings. The SEC revealed that accounting errors on one of the projects had caused Fluor to significantly inflate its net earnings, by as much as 37%, between fiscal 2016 and the first quarter of fiscal 2019.

In addition to the settlement with Fluor, the SEC confirmed that five former and current officers and employees of the company have agreed to cease and desist from engaging in or contributing to any further violations. These individuals will also be subject to penalties ranging from $15,000 to $25,000. Both Fluor and the named officers have neither admitted nor denied the allegations presented by the SEC.

Fluor has yet to issue an official statement in response to this matter.