The three top financial executives at Computer Associates International Inc. resigned under pressure Wednesday after preliminary findings of an investigation by the companys board found a host of accounting irregularities related to the way CA booked revenue several years ago.
Ira Zar, CAs chief financial officer; Lloyd Silverstein, senior vice president of finance; and David Rivand, vice president of finance; all quit after Sanjay Kumar, chairman and CEO, asked for their resignations. The departures are the result of a probe by the audit committee of CAs board, which found that the company regularly fudged the dates on customer contracts in order to manipulate which fiscal quarter the revenue would be recognized in.
"The audit committees investigation is continuing, but we have determined that CA recognized certain revenue prematurely in the fiscal year ending March 31, 2000," said Walter Scheutze, chairman of the audit committee, and a former Securities and Exchange Commission official. "A number of software contracts in that fiscal year appear to have been signed after the end of the quarter in which the revenues associated with such contracts had been recognized."
The internal investigation began as a result of similar probes by the Department of Justice and the SEC, which are both looking into CAs accounting practices in the late 1990s. The company, based in Islandia, N.Y., changed its method of recognizing revenue, along with some other modifications to its business model, in October 2000. The government investigations are still ongoing.
Kumar said a search for a new CFO would start immediately, and that Douglas Robinson, senior vice president of finance, will serve as interim CFO.
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