The company's reputation could be salvaged

According to a report over weekend in Swiss newspaper SonntagsZeitung, auditors probing the firm's accounts have found no evidence of fraud.

The report helped lift Adecco shares by more than 4% in early trading.

The rise came despite news that the firm is facing two US lawsuits accusing it of issuing "misleading" statements.

The firm's accounting irregularities centre around its American operations.

'False and misleading'

According to SonntagsZeitung, investigators probing Addeco's accounts have uncovered a 'black hole' of between 40 and 50 million euros, much less than previously feared.

The newspaper reported that the discrepancy could have been caused by "differences between the booking of orders by Adecco and its customers."

The two US lawsuits, filed on behalf of Adecco shareholders, allege that the firm issued "false and misleading statements" to the financial markets between 16 March, 2000, and 9 January 2004.

Shares in the group, the world's biggest employment agency, fell by nearly 40% last week after the firm admitted to "material weaknesses" at its North American operations.

The announcement triggered an investigation by the Securities and Exchange Commission (SEC), the US financial markets watchdog.

Fighting back

Adecco's chairman, John Bowmer, has now stepped into an executive role to lead efforts to resolve the crisis.

In a separate Swiss newspaper article, Adecco's former finance chief Felix Weber said he would take ultimate responsibility for the outcome of the ongoing accountancy investigations.

Speaking to the TagesAnzeiger newspaper, Mr Weber said he had been "responsible for control" at the company.

Mr Weber, who resigned on Friday, said he would take responsibility irrespective of "where and why the errors were committed".

Cash strength

Adecco's board has also appointed a second trouble-shooter; Philippe Marcel, chairman of its French operations, is to serve as "the board's special delegate in the US".

The group's board said it remained "strongly confident in the company and its future" and highlighted its strong cash balances of 900m euros ($1.5bn; �618m) at the end of 2003.

Issuing a lengthy list of the problems unearthed so far at its North American unit, it added that some had already been corrected, and said the rest were being addressed.

The unit's problems affected IT security, payrolls, and the way sales were booked.

Adecco specialises in providing specialist temporary staff to service industries.