Investors boost Barrett after good audit news

Investors on Wednesday gave a big bump to Barrett Business Services Inc., the troubled Vancouver human relations company, following good news from a forensic accounting investigation.

Barrett, traded as BBSI, ended Wednesday up nearly 16.5 percent at $34.57.

The investigation headed by a major accounting firm was launched in March following the discovery of “unsupported journal entries,” which led to the dismissal of Barrett’s chief financial officer.

Investigators found even more unsupported entries in their review of company financial records dating to 2009. But in a Securities and Exchange Commission filing Tuesday, Barrett’s audit committee announced the entries “had no effect on the company’s consolidated balance sheets and … the entries did not have a cumulative effect on income from operations, net income or earnings per share.”

At issue was the overstating of payroll costs, taxes and benefits and other expenses while understating workers’ compensation expenses, according to the filing. Those unsupported entries are out of line with generally accepted accounting principles, or GAAP.

The company came under fire in 2014 when it acknowledged that it needed to pump up its reserves to cover pending workers’ compensation claims, a part of the company’s business. That resulted in an investigation this year finding “no illegal act” had been committed, though a class-action lawsuit was filed.

Despite the step forward in Tuesday’s filing, Barrett remains at risk of getting its stock delisted from the Nasdaq exchange.

Nasdaq warned the company in March it could be delisted “due to its failure to timely file its annual report.”

Barrett said in Tuesday’s SEC filing it intends to file an audited 2015 financial statement and restated financials from 2013 and 2014 by May 9 — as requested by Nasdaq — “although the company cannot assure that it will be able to do so.”