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Politics : Formerly About Applied Materials -- Ignore unavailable to you. Want to Upgrade?

To: StanX Long who wrote (60749)	2/20/2002 3:01:29 AM
From: StanX Long	Read Replies (1) \| Respond to of 70976

Federal Inquiry Into Computer Associates By ALEX BERENSON February 20, 2002 nytimes.com Federal prosecutors in Brooklyn have opened a preliminary inquiry into whether Computer Associates deliberately overstated its profits to inflate its stock price and enrich its senior executives, two people close to the investigation said. The inquiry comes in the wake of the collapse of Enron, which has caused the Securities and Exchange Commission and prosecutors to put new scrutiny on companies that use unusual accounting practices. Since October 2000, Computer Associates, a giant software company based in Islandia, N.Y., has reported its financial results using a nonstandard ``pro forma'' accounting practice that makes its profits and sales seem much larger than under standard accounting rules. The company also continues to report its results under regular accounting rules. But because of a change Computer Associates made in its contracts when it began using pro forma accounting, the standard results are essentially meaningless for investors.