Groupon Inc.'s latest restatement, following accounting misstepslast year, heightens concern about the reliability of the company'sfinancial reporting and raises questions whether auditors gaveenough oversight to the coupon provider's novel business model.

The Chicago-based company reported a “material weakness” infinancial controls on March 30 and said fourth-quarter sales werelower than previously stated because of higher refunds tomerchants. That cut revenue in the period — Groupon's first as apublic company — by $14.3 million to $492.2 million.

The announcement added to setbacks for Groupon, which hasstruggled to get its financial statements in order since filing foran initial public offering in June. The company abandoned anaccounting method for operating income after a review by regulatorsand later restated 2010 results. The moves raise questions aboutwhy Groupon's auditor, Ernst & Young LLP, didn't point outconcerns sooner, said Herman Leung, an analyst at SusquehannaFinancial Group in San Francisco.