From the New York Times today.
nytimes.com
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July 1, 1999
SEC Is Investigating Microsoft's
Accounting Practices
By JOHN MARKOFF
Microsoft Corp. announced Wednesday that the Securities and Exchange Commission was investigating the company's accounting practices involving the stating of financial reserves.
Industry experts said the SEC investigation could be part of its effort to restrain so-called "cookie jar" accounting, which can have the effect of smoothing over differences between strong and weak quarters. Microsoft has consistently denied any such intent and insists that it has adhered to "conservative" accounting practices.
In a telephone conference call Wednesday with financial analysts and
reporters, Greg Maffei, Microsoft's senior vice president and chief
financial officer, said the company had learned of the SEC inquiry in
the past two months and knew few details, including how long it
would continue.
"We are obviously a company that is known for conservatism and I
would be surprised if someone was to examine our books and suggest otherwise," he said.
As is its custom in such matters, the SEC declined to comment on
whether an investigation was under way.
But Maffei said Microsoft believed that the SEC had begun its investigation in January in a response to a wrongful discharge suit filed by Charles Pancerzewski, a former Microsoft internal auditor.
The lawsuit, brought in 1996 and settled last November on terms not
made public, alleged that the Redmond, Wash., software publisher had
manipulated revenue reserves totaling hundreds of millions of dollars to make its profits appear more stable. ....
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More trouble for Microsoft. And its probably endemic throughout the technology sector. By the way, has Microsoft ever paid a dividend?
Thure
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