Washington (May 20, 2002) -- As part of its ongoing investigation into the accounting practices of Islandia, N.Y.-based Computer Associates, the Securities and Exchange Commission has subpoenaed former CA auditor Ernst & Young.The Big Five firm, which served as auditor to the software manufacturer until two years ago, said it was cooperating fully with the investigation.
The SEC probe on CA centers on whether the company overstated profits to help inflate its stock price by using a controversial accounting method -- which booked revenue and profit over the life of a contract in lieu of recognizing more of the revenue on an up front basis as mandated by GAAP.
--Electronic Accountant Newswire staff
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