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
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.