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Discount coupon hawker Groupon has revised its fourth quarter revenue-and-loss statement, heightening concerns about the quality of its financial reporting.

The snafu takes the web upstart's revenues for the period down $14.3m to $492.2m and increases its losses to $65.4m from $42.7m, as the firm needed to set aside more money for refunds to unhappy users.

The fact that nobody at the company, nor its outside auditors and accountants, noted that higher-priced deals would necessitate more money being set aside for potential refunds is worrying, especially since it's not Groupon's first accounting mistake in its short public history.

The daily deals site said it had a "material weakness" in its financial controls that led to the restatement of its fourth quarter results, which were first submitted nearly two months ago.

"In connection with the audit of our financial statements as of and for the year ended December 31, 2011, we concluded there is a material weakness in internal control over financial reporting related to deficiencies in the financial statement close process," Groupon said in its latest filing to the Securities and Exchange Commission (SEC).

"We have begun taking steps and plan to take additional measures to remediate the underlying causes of the material weakness, primarily through the continued development and implementation of formal policies, improved processes and documented procedures, as well as the continued hiring of additional finance personnel."

When Groupon first filed to go public, much attention was focused on a new accounting metric that critics believed was misleading, the Adjusted Consolidated Segment Operating Income (ACSOI). The coupon site said this figure was important for management to evaluate the performance of the business, but the SEC felt it had no place in the firm's prospectus.

ACSOI showed Groupon in a particularly flattering light, since it left out the firm's largest expense - marketing - as well as acquisition costs. Despite Groupon's protests, the commission asked the web biz to pull the metric from its prospectus and stick with figures investors were used to.

This latest gaffe is likely to add to concerns that daily deals sites like Groupon could turn out to be something of a flash in the pan. The firm hasn't done well on the stock market so far, dropping 26.9 per cent from its debut close at $26.11.

The enormous funds the site sinks into marketing, along with its financial reporting troubles and the rise in competitors in the coupon market, has some investors wondering if Groupon's fall will be as spectacular as its rise.

The site has yet to report making any money, although it still believes it will do so in the first quarter of this year, when it's anticipating an operating profit of $15m to $35m. However, Groupon has not given a forecast for net profit or loss.

The firm will report its first quarter results on 14 May, which has also allowed it to extend the lock-up period for some of its shareholders.

As is typical with an IPO, underwriters and certain holders of stock sign up for a period of time during which they can't offload any of the stock they've got. This was due to expire on 2 May, at which time the market could be flooded with Groupon shares if many original investors lose faith in the company.

The lock-up includes a provision that the period can be extended if earnings or other material news is going to be announced within 16 days of the end of the agreement. As the daily deals site is announcing results on 14 May, the lock-up period is now extended until 2 June. ®

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