CA managers admit accounting faults
Analysts say vendor's business will not be affected in the short term
Guilty pleas by three more Computer Associates (CA) executives are unlikely to have an immediate effect on the vendor or its customers, according analysts and resellers.
Last week former CA chief financial officer Ira Zar pleaded guilty to three counts of securities fraud and obstruction of justice. Senior accounting and financial reporting executives David Kaplan and David Rivard pleaded guilty to charges of conspiracy to obstruct justice and conspiracy to commit securities fraud.
The charges are part of a continuing joint investigation by the US Attorney's Office and financial regulator the Securities and Exchange Commission (SEC).
The agencies are investigating CA's statements of results for the financial year ending 31 March 2001. In a statement CA said: "The (CA) Audit Committee determined that CA had prematurely recognised revenue in fiscal 2000 on the basis of software licence agreements that were signed in a later quarter."
The guilty pleas come after CA's former vice-president of finance, Lloyd Silverstein, pleaded guilty to conspiracy to obstruct justice on 22 January.
Analyst Gartner said the announcement does not immediately affect the company or its customers, but that the investigation may affect current CA senior management in the long term.
"This announcement does not change our current 'caution' rating on CA overall, or our financial rating. Clients and prospects should weigh the potential risks this investigation and any related accounting issues will have on CA when performing their usual due diligence," said Gartner in a statement.
Kathy Gibson, group marketing manager at CA reseller Bytes Technology, said: "(The investigation) hasn't affected (CA 's) business at all. In fact, our revenues with CA continue to grow so I'd say it hasn't affected our customers either.
"Generally, the customers are interested in what the products can deliver."
Mike Thomason, principal research analyst at Butler Group, said: "CA has already admitted that it happened a long time ago. I don't see why it should have any effect on its business or its resellers. There was probably some negative comment, but that would have been at least two or three years ago.
"If people were worried about the repercussions of the financial irregularities and the liability of CA, the irregularities were recognised three years ago. If there was a problem with the longevity of the firm, something would have happened back then."