Veritas at risk of losing Nasdaq listing

Veritas has been forced to restate its results following accounting errors, it was announced on Monday.
Written by Jo Best, Contributor
Veritas has been forced to restate its financial results following accounting errors, it was announced earlier this week.

The accounting errors came to light following an audit that showed there had been errors in the way the expenses and revenue were dealt with, meaning that the software company will have to restate its results for 2001 and 2002, to the tune of several million dollars. The knock-on effect will mean that 2003's results will also have to be recalculated.

The restatement will see 2001's revenue fall between US$1 million and US$5 million from the US$1.49 billion originally declared, with 2002's revenue going up by between US$5 million and US$10 million from the US$1.51 billion previously stated.

The results for last year will also see a multi-million dollar change--downwards--with revenue falling by between US$10 million and US$15 million.

It's not the first time Veritas has had accounting problems that led to its results being restated. In 2003, the company restated its annual results three times in the course of the year, after sales deals were improperly accounted, including a barter deal with media giant Time Warner.

The chief financial officer in charge at the time, Kenneth Lochnar, left the company after in 2002 after it was discovered his claim to have an MBA from the prestigious Stamford University in the U.S. was untrue. CEO Gary Bloom said in conference call yesterday that the investigation hadn't started as a result of Lochnar's creativity on his resume.

While the restatement might not have a huge effect on the company itsel--Veritas will make US$95 million from a recent tax settlement, outweighing any loss from the restatement-- the news will make a difference to the U.S. stock market. Due to the financial wrangling, Veritas won't meet the deadlines for declaring its annual report and, as a result,risk losing its listing on the Nasdaq stock index.

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