updated 1/30/2004 12:09:50 PM ET 2004-01-30T17:09:50

An internal probe of possible accounting problems at the world's largest staffing firm Adecco has so far found only minor bookkeeping mistakes.

Adecco's announcement appeared to sooth investor fears that the company could be embroiled in a major balance sheet fraud.

Its shares slumped about 26 percent in the wake of its announcement earlier this month that it had uncovered problems with payroll, client billing and security of computer system in its U.S. operation, based in Melville, N.Y.

The company is under investigation by financial authorities in Switzerland and the United States. Its problems have sparked class action suits and prompted the resignation of chief financial officer Felix Weber and Julio Arrieta, head of U.S. operations.

Adecco said Friday that Arrieta's replacement is Ray Roe, chief executive of the company's highly profitable Ajilon unit, which places highly skilled people such as engineers, accountants or lawyers.

Adecco earlier announced it was delaying the release of its final 2003 results and would have to restate its earnings for the first three quarters of 2003. The company declined to say when it will publish its 2003 annual report, previously scheduled for late February.

"Based on the currently available information, however, the board has so far found no evidence demonstrating any major misappropriations or irregularities that would be financially significant to the company as a whole," Adecco said in a statement Friday.

"Instances of local misappropriations and irregularities _ mainly at branch level _ have been identified in certain countries," it said without offering specifics.

Although the financial impact of these unspecified problems is likely to be limited, the company warned that they were "nonetheless of concern."

Analysts welcomed Adecco's statement although it failed to clarify the financial extent of the company's problems. The company has refused to comment on specifics, citing U.S. laws on disclosing information.

"The legal constraints certainly prevent them from saying more. But at least it's clear now that no major fraud is involved," said Roger Steiner, analyst at Julius Baer Brokerage.

Adecco, which is based near Geneva, earned 362 million Swiss francs (then worth $261 million) in 2002. It directly employs 28,000 people in 68 countries and claims to connect 650,000 jobseekers and temporary staff with businesses daily.

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