* Shares jump by more than a third
* SEC filings remove some fears
* Company still sees risks from "reputational issues" (Recasts, adds details from filings, analyst comment, updates share movement)
CHICAGO, Aug 18 (Reuters) - Huron Consulting Groupshares jumped 35 percent a day after the company reported better-than-expected results, but analysts warned that questions about Huron's reputation and outlook that walloped the stock earlier this month still linger.
Huron shares rallied to $18.48 in Tuesday afternoon trading on the Nasdaq, partially reversing a loss of more than 70 percent suffered earlier this month when the company said its entire top management team would exit amid an accounting scandal.
Despite a second-quarter profit that topped Wall Street's view, and some investor relief that the earnings restatement is complete, analysts noted that Huron still faces risks to its reputation and operations.
"It doesn't necessary mean the future of the company has changed one way or the other," said Joseph Foresi, an analyst at Janney Montgomery Scott.
"Some of the issues that the company faces in the near term are still there," he said. Janney currently has a "neutral" rating on Huron shares.
Earlier this month, Chicago-based Huron, which rose in 2002 from the ashes of collapsed accounting giant Arthur Andersen, said its entire top management team would leave the company and that it would restate more than three years of results.
The news came after Huron's audit committee discovered shareholders of four businesses that Huron acquired between 2005 and 2007 redistributed portions of their acquisition-related payments among themselves and to certain Huron employees who were not identified.
The revelations were a blow to the company's credibility and its shares immediately plunged.
Huron, which is being investigated by the U.S. Securities and Exchange Commission (SEC), reassured investors on Monday that no more restatements would be necessary.
While the SEC announcement unquestionably improved investors' mood on the shares, Tuesday's gain was likely boosted by some investors covering previous short positions, said William Lefkowitz, option strategist at brokerage firm vFinance Investments.
"Earlier this month, when the stock collapsed, some investors shorted it, expecting that trend to continue. Now those investors are getting squeezed," Lefkowitz said.
"With the good earnings we are seeing a short-covering rally. In addition, some investors might be buying the stock with more confidence in their underlying business," he said.
A short position occurs when an investor borrows shares and sells them, expecting the price to fall. If the market goes up, however, short sellers are forced to buy back their shares.
Huron posted a second-quarter profit above analysts' expectations, helped by higher revenue from its health and education consulting segment.
"The news seems to have removed a cloud from over the stock, which plunged nearly 70 percent on the restatement news on Aug. 3," said WhatsTrading.com option strategist Frederic Ruffy.
The company said in a regulatory filing that due to the significant decline in its stock price, it may record a noncash goodwill impairment charge for the quarter ending Sept. 30, leading to noncompliance with the financial covenants in its credit agreement.
"Overall, we view the new disclosures as a slight net positive, giving more visibility on some unknowns, but introducing other unknowns," said Sean Jackson, analyst at Avondale Partners, in a research note.
In a separate government filing, Huron said it would cooperate with SEC investigators but that it could not predict the outcome of an investigation, or private lawsuits.
The company said it may sustain damage arising from "reputational issues" that may affect the company's ability to retain senior managers and attract new talent and new business.
Huron also noted potential distractions for management, increased costs and expenses related to the SEC investigation, damage to Huron's reputation, the possible imposition of fines.
In a filing, Huron said it has "identified a material weakness in our internal control over financial reporting" related to accounting for acquisition-related payments.
"Due to its inherent limitations, internal control over financial reporting may not prevent or detect misstatements," Huron said.
Huron has scheduled a conference call with analysts for Wednesday. (Reporting by Kyle Peterson and Doris Frankel; Editing by Tim Dobbyn and Matthew Lewis)
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