Accounting Woes Punish Peregrine - TheStreet

Updated from 8:32 a.m. EDT

Peregrine Systems


, which recently delayed its quarterly earnings report, is conducting an internal investigation of its accounting, and the company said its chief executive and chief financial officer have resigned.

The software company was losing more than half its value in recent trading, falling 61% to $1.01. The stock traded as low as 98 cents Monday morning.

Peregrine said its board's audit committee will handle the internal probe. The investigation deals with potential accounting inaccuracies discovered by KPMG, the company's independent auditors. KPMG took over Peregrine's books in April to replace Arthur Andersen. When Peregrine

said its results would be delayed, the company said its new auditors needed time to go over its numbers.

Based on the preliminary information reviewed to date, certain transactions involving revenue recognition irregularities totaling as much as $100 million have been called into question and may have been recorded in fiscal 2001 and fiscal 2002.

The company has informed the

Securities and Exchange Commission

of the internal investigation and plans to keep regulators informed of its progress.

Additionally, Steve Gardner, Peregrine's chairman and chief executive, and Matt Glass, chief financial officer, executive vice president of finance and a director on the board, have resigned. The company named Executive Vice President Rick Nelson acting chief executive officer and a director. Peregrine also named Fred Gerson acting chief financial officer and appointed Charles La Bella as executive vice president and senior counsel.