CA says the firings in its legal and finance departments stem from an investigation into the company's accounting practices.

InformationWeek Staff, Contributor

April 19, 2004

1 Min Read

ISLANDIA, N.Y. (AP) -- Facing the cloud of a long-running accounting investigation, Computer Associates International Inc. fired nine people Monday in the software company's legal and finance departments.

Computer Associates said the decision resulted from an internal investigation by the board's audit committee, which is led by a former chief accountant for the Securities and Exchange Commission. The committee is nearing the end of its investigation into the company's accounting practices and whether Computer Associates should restate earlier financial results.

Four former Computer Associates executives have pleaded guilty to charges stemming from the company's practice of allowing contracts to be booked in a prior quarter to inflate sales figures. Among them is Ira Zar, CA's former chief financial officer, who implicated two other high-level executives.

Their names were not disclosed, but prosecutors noted that Zar reported to CA's chairman and CEO, Sanjay Kumar.

The audit committee has acknowledged that CA "prematurely recognized revenue" in fiscal 2000, but reiterated Monday that it does not believe such accounting practices continue.

CA spokesman Dan Kaferle would not comment on whether the board plans additional meetings this week or whether Kumar's fate remains on the table.

In January, Computer Associates received a Wells Notice, in which the SEC gives warning that civil enforcement charges may be coming. Kumar said in Monday's statement that Computer Associates has submitted its response.

Of the employees fired Monday, four were in the legal department and five in finance. Eight of the employees worked in CA headquarters in Islandia; one worked in Atlanta.

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