InPhonic’s Inadequate Controls

Borrow a lot of money, spend a lot of money, make… not enough money. Bankruptcy may have enabled InPhonic, the USA’s biggest web-based seller of wireless phones and services, to restructure and sell itself, but did anyone learn a lesson about why a business with booming revenues also suffered from crippling losses? There were no clues in the press release announcing court approval for the sale of InPhonic to Versa Capital Management. Take a look at this great article, which places the blame squarely on inadequate financial controls. A telecoms business that has great salesmen, unhappy customers and financial statements that cannot be trusted… does that sound familiar? Of course, there is ultimately only one solution to this kind of madness, which is that investors place as much emphasis on financial discipline as they do on headline returns. It is their money after all.

Eric Priezkalns
Eric Priezkalns
Eric is the Editor of Commsrisk. Look here for more about the history of Commsrisk and the role played by Eric.

Eric is also the Chief Executive of the Risk & Assurance Group (RAG), a global association of professionals working in risk management and business assurance for communications providers.

Previously Eric was Director of Risk Management for Qatar Telecom and he has worked with Cable & Wireless, T‑Mobile, Sky, Worldcom and other telcos. He was lead author of Revenue Assurance: Expert Opinions for Communications Providers, published by CRC Press. He is a qualified chartered accountant, with degrees in information systems, and in mathematics and philosophy.