Three former executives of software maker Computer Associates -- Ira Zar, David Kaplan, and David Rivard -- have pleaded guilty to conspiracy to obstruct justice and conspiracy to commit securities fraud charges. The pleas were made in connection with a joint investigation by the United States Attorney's Office for the Eastern District of New York and the Securities and Exchange Commission regarding CA's past accounting practices.
Last Fall, CA an independent investigation by CA's Audit Committee of CA's accounting practices, (focusing on CA's fiscal year ended March 31, 2000) found that the company had prematurely recognized revenue in fiscal 2000 on the basis of software license agreements that were signed in a later quarter. At that time, CA asked for the resignations of Chief Financial Officer Zar, and senior accounting and financial executives Kaplan and Rivard. Zar has been replaced by Jeff Clarke, a former executive at Hewlett-Packard.
According to CA, the Audit Committee has almost completed its investigation and its assessment of whether a restatement of prior period financial statements is required under GAAP, and, if so, the extent of such restatement. In a statement, the company said, "The Audit Committee continues to believe that the Company's New Business Model and financial reporting are unaffected by the accounting practices that were in place prior to the Company's adoption of the New Business Model in October 2000."
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