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Articles: CA fires nine in connection with probe

Posted by admin on Tuesday, April 20, 2004 - 02:07 AM

SAN FRANCISCO (CBS.MW) -- Computer Associates on Monday fired nine employees related to an internal probe and an ongoing federal investigation of the software maker's accounting practices.
The Islandia, N.Y.-based company didn't release the names of the employees, saying only that five of them worked in the finance department and four worked in the legal department. Eight worked at company headquarters, and one was based in Atlanta, the company said. Computer Associates' former Chief Financial Officer Ira Zar pleaded guilty to securities fraud earlier this month, and is now working with federal investigators. The company also fired Steven Woghin, the company's lead attorney, in recent days. The company's internal audit committee is nearing completion of its investigation, Computer Associates (CA: news, chart, profile) said. The committee, headed by Walter P. Schuetze, a former top accountant for the Securities and Exchange Commission, will determine whether a restatement of prior period financial statements is needed. The company's board is expected to meet soon to decide whether to fire Sanjay Kumar, chairman and chief executive. Kumar has not been charged with wrongdoing, but he was chief operating officer of the company during the period under investigation. Zar and other executives who are cooperating with prosecutors have said in court that the company regularly allowed customer contracts to be recorded as revenue after the quarterly reporting periods closed, violating a basic tenet of accounting. The backdating of sales allowed the company to meet analyst targets for sales and profit. Computer Associates shares fell 33 cents to $26 following the announcement. The company's stock has nearly doubled from the same period a year ago.

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