CA fires nine amid accounting probe

Computer Associates International has fired nine employees in its legal and finance departments in connection with its internal...

Computer Associates International has fired nine employees in its legal and finance departments in connection with its internal investigation of accounting violations which have already led to criminal charges against several former executives.

A company spokesman declined to release the names or positions of the employees.

Eight worked in CA's New York headquarters, while another was based in Atlanta. CA said it will use staff from other areas and its international subsidiaries temporarily to handle the additional work in the affected departments.

CA, one of the IT industry's largest software suppliers, admitted in October to booking revenue from contracts before they were finalised to inflate its quarterly earnings in its 2000 financial year.

The US Securities and Exchange Commission (SEC), which is pursuing sanctions against involved employees and has warned CA it may take punitive action against the company, estimated CA improperly recognised $1.4bn (£781m) in revenue throughout the year.

CA fired its then-chief financial officer, Ira Zar, in October 2003, when it released preliminary findings from an investigation by its board's audit committee. Zar and three former colleagues have pleaded guilty to federal charges including securities fraud.

More than a dozen CA employees have now been forced out as a result of the accounting scandal, including the company's general counsel, Steven Woghin. CA initially said Woghin would change positions but remain with the company, but reversed two weeks ago it announced that Woghin's employment had been terminated.

Questions remain about the company's chief executive, Sanjay Kumar, who served as president and chief operating officer when the accounting improprieties occurred.

Kumar appears to be a target of investigators from the SEC and US Department of Justice, which say their inquiries into CA's past are still in progress.

CA's board is close to completing its own assessment of the accounting problems and whether the company needs to restate its financial reports from 2000. CA changed its accounting methods in November 2000 - eight months after the end of its 2000 financial year - to recognise revenue gradually over the life of a contract.

Stacey Cowley writes for IDG News Service

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