Veritas hunts for multi-million dollar accounting truth

Veritas has been forced to restate its results following accounting errors, it was announced on Monday.

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 $1m and $5m from the $1.49bn originally declared, with 2002's revenue going up by between $5m and $10m from the $1.51bn previously stated.

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

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 Time Warner.

The CFO 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 US university Stamford 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 CV.

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