SEC Asked About CA's Accounting Last Fall

Four months before confirming that it's under investigation by the Securities and Exchange Commission and U.S. attorney's office, Computer Associates (CA Quote) received a letter from the SEC asking numerous questions about the pro forma accounting it used under its new business model.

The Oct. 26, 2001, letter, obtained by research firm SEC Insight under a Freedom of Information Act request, asked Computer Associates to explain how its pro forma pro rata numbers differ from accounting under generally accepted accounting principles.

The Islandia, N.Y., company began reporting pro forma pro rata numbers at the end of 2000 to compare revenue collected each month under its new business model with revenue collected upfront under the previous model. ...