Interpublic Group ( IPG), the advertising company that last week delayed its quarterly results, confirmed after the close Tuesday what investors were afraid of -- accounting irregularities.

The company was supposed to report its second-quarter results last week, but Interpublic said it needed time to review certain items. The result was the discovery of $68.5 million of charges, mainly in Europe, that hadn't been properly expensed.

Interpublic said the charges don't affect the company's cash position and added that the amounts involved "were not material to any prior period." Still, the company will restate its results, which will cover periods back to 1997 and before.

"Procedures recently put in place by management identified an accounting issue that merited further review," John Dooner, Interpublic's chairman and CEO, said in a press release. "While it is unfortunate that we had to postpone our earnings announcement, it's unquestionably appropriate to have taken decisive action in this matter. We have also taken the necessary steps in order to prevent this situation from recurring in the future. The restatement will have no impact on the company's operating performance going forward."

Interpublic said it has established procedures to prevent similar situations from arising in the future. The company is also conducting an additional review of internal operations and personnel.

The company said it earned 31 cents a share in the quarter, reversing a loss of 31 cents in the same period a year ago, but short of analysts' estimates of 39 cents.

Revenue in the second quarter fell 8.4% to $1.61 billion from $1.76 billion in 2001. Domestic revenue, which constitutes 54% of the company's portfolio, declined 13.7% in the second quarter to $866 million. U.S. advertising and media revenue dropped 14.5%, while other marketing services declined 12.7%. International revenue slipped 1.3% to $747 million.

The company indicated that the advertising market remains tough, and, as a result, its full-year earnings will probably fall short of Wall Street's projections. Interpublic now expects earnings for 2002 of $1.25 to $1.35 a share, while analysts are looking for a profit of $1.46. Additionally, the company said third-quarter revenue will probably decline 5% to 7% from the same period in 2001.

Shares of Interpublic dropped 87 cents, or 5.2%, to $15.78 in regular trading and fell another 73 cents to $15.05 in Instinet action after the close.