SEC May Look Into Boeing’s Accounting Practices After Whistleblower Complaint

FILE - MARCH 12: The FAA approved Boeing's plan to fix the 787 Dreamliner's batteries on March 12, 2013, with more testing required. MANCHESTER, ENGLAND - APRIL 24: The new Boeing Dreamliner 787 sits on the tarmac at Manchester Airport during it's tour of the world on April 24, 2012 in Manchester, England. The Boeing Dreamliner 787 is made of composite materials and uses 20% less fuel than equivalent aircraft. Thompson Holidays were the first Uk company to buy the new 787. (Photo by Christopher Furlong/Getty Images)

Boeing will face a federal probe over accounting practices related to the 747 and 787 jetliner programs.

More federal probes could be in Boeing’s future as the Securities and Exchange Commission may elect to look into the manufacturer’s accounting practices for the 747 jumbo aircraft and 787 Dreamliner programs. Bloomberg reports the investigations may come after a whistleblower complaint was submitted to the federal agency.

Citing an anonymous source close to the situation, Bloomberg reports the investigation will center on statements made about the 747 and 787 programs and the company’s use of “program accounting” methods. Considered a standard practice in the aviation and aerospace industries, program accounting allows manufacturers to spread their initial manufacturing costs across several years.

However, federal investigators may be concerned that the Chicago-based manufacturer may have used the accounting method to muddy their financial outlook on each aircraft program. Both the 747 and 787 programs experienced public shortfalls, which has left the aviation industry curious about the future of each aircraft. In 2013, Dreamliners were grounded by the Federal Aviation Administration after a rash of lithium battery fires plagued the new commercial aircraft. In January, the airframe manufacturer announced they would slow down production of the 747 to six completions per year due to reduced demand for the original jumbo jet.

The investigation has not yet been confirmed publicly by Boeing or the SEC, with both groups declining comment. The sources close to the situation told Bloomberg the SEC may not necessarily elect to bring an enforcement action against the aircraft manufacturer as a result of the probe.

The situation marks the second time in three months Boeing has been mentioned alongside federal authorities. In December, Boeing agreed to pay $12 million in fines for their part in missing a deadline to address fuel tank design flaws.

[Photo: CHRISTOPHER FURLONG , CHRISTOPHER FURLONG GETTY IMAGES]