Veritas restates three years' results

Veritas restates three years' results

Storage software maker,Veritas Software, has filed a report restating three years worth of financial results, removing $US29 million in revenue after an internal investigation revealed accounting improprieties.

In an amended annual report detailing the revisions, Veritas cited a number of practices violating accounting rules, including incorrect deferral of professional services revenue, the unsubstantiated accrual of certain expenses, and the overstatement of accounts receivable and deferred revenue.

The biggest change Veritas reported was in its results for the year ended December 31, 2003, in which the company originally reported revenue of $US1.771 billion. In its restatement, Veritas removed revenue of $US24 million, bringing its total for the year to $US1.747 billion. The company also docked $1 million in revenue from its 2002 results, and $3 million from its 2001 results.

For the quarter ended March 31, the first of Veritas' 2004 fiscal year, the company decreased its reported revenue $US1 million, to $US486 million.

Veritas said concerns raised by an employee in late 2003 triggered its investigation. The company disclosed in March that it would delay filing its 2003 annual report and restate some past results.

In its statement about its revised results, Veritas confirmed its earlier guidance for the current quarter, saying it expects revenue of $US490 million to $US505 million. The statement included no comment from Veritas' executives about the accounting violations.

In March, when the company first warned of the problem, chairman and chief executive officer, Gary Bloom, said in a written statement that the company's financial reporting was substantially improved by the November 2002 arrival of chief financial officer (CFO), Ed Gillis.

The adjustments for 2003 were largely a consequence of correcting errors from earlier periods, the company said at the time. Gillis was hired after the resignation of the company's former CFO, Kenneth Lonchar, who admitted to lying on his resume about receiving an masters of business administration from Stanford University.

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