2007 hasn't been an especially kind year to Dell. In January, CEO Kevin Rollins stepped down and was replaced by Dell founder Michael Dell. The company then faced accusations that it had received illegal kickbacks from Intel and later delayed its 10-K SEC filing due to accounting inconsistencies. In addition, Dell was accused in May of deceiving its customers with "bait-and-switch" tactics

Earlier this month, DailyTech reported that Dell ran into production snags with its new 13.3" XPS M1330 notebook. The hot item was hampered by a complex painting process for Pearl White and Crimson Red color options and shortages of the LED-backlit display.

The fact that Dell didn't foresee these problems before regular production began is quite perplexing. That being said, it appears that production problems with the XPS M1330 aren't the only troubles surrounding Dell these days.

Dell today dropped another bombshell on the world when it announced that senior management routinely embellished the company's quarterly financial reports. The fraudulent actions took place between 2003 and 2006 according to Dell. It should be noted that 2006 was the year that Dell acquired Alienware and lost its "number one PC builder" crown to Hewlett-Packard.

The "accounting errors and irregularities" were discovered by an Audit Committee investigation and Dell management. The team was comprised of 375 professionals whom conducted investigations at Dell's major operational centers around the globe. Over 200 personnel interviews were conducted and over five million documents were examined.

It was found that net income was overstated by between $50 to $150 million USD during the period. On a quarterly basis, Dell overstated its net income and earnings per share (EPS) the most during fiscal Q1 2003 and fiscal Q2 2004. During those quarters, net income and EPS were overstated by as much as 13 percent.

"The investigation identified evidence that certain adjustments appear to have been motivated by the objective of attaining financial targets, said Dell in a press release. "According to the investigation, these activities typically occurred at the close of a quarter. The investigation found evidence that, in that timeframe, account balances were reviewed, sometimes at the request or with the knowledge of senior executives, with the goal of seeking adjustments so that quarterly performance objectives could be met."

"The rigorous examination of our accounting and finance processes, along with the remedial actions taken and planned, have made and will continue to make Dell a far stronger company and provide a solid foundation on which to move the business forward, reinforce our standards and focus our energy on serving our customers," said Dell vice chairman and CFO Donald J. Carty.

As a result of the investigation, Dell is implementing a number of policies to ensure that its financial performance is accurately reported in the future. The company laid out four key points -- Leadership, People, Structure and Process -- to aide in putting the company back on track.

"We are committed to achieving and maintaining a strong control environment, high ethical standards and financial reporting integrity," said Dell chairman and CEO Michael Dell. "This commitment will be communicated to every Dell employee and external stakeholder. It is accompanied by renewed management focus on decision-making and processes intended to drive long-term shareholder value."

This latest news from Dell comes just days after it was announced that ex-CEO Kevin Rollins will receive $48 million USD in cash from his stock options with the company.