Feeds

Ariba restates more accounts

Confusion reigns

  • alert
  • submit to reddit

SANS - Survey on application security programs

ComputerWire: IT Industry Intelligence

The financial confusion at e-business software developer Ariba Inc has deepened following the announcement that it will now have to restate its fiscal 2000 figures and 10 quarters of results. This follows an earlier announcement that it would have to restate its fiscal 2001 figures.

The troubled started when an internal review began on December 21, and identified a transaction of $10m made in March 2001 between two officers of the company - chairman and co-founder Keith Krach and the then president and chief operating officer Larry Mueller.

Ariba's accounting had originally regarded the payment as a personal transaction (largely on the basis that it involved personal funds of Krach, rather than company funds). But it now deems that the payment should be booked as a capital contribution to Ariba. This discovery forced Ariba to announce in early January that it would have to restate its fiscal 2001 figures.

Now it seems that the Sunnyvale, California-based company also failed to record as costs $1.2m worth of chartered-airplane services provided by Krach to Mueller. Ariba didn't record the payments as expenses, and the company declined to give details on the flights or their purpose.

It is irregular for a chairman, and not the company, to cover these expenses, as Securities and Exchange Commission rules state that payments by a principal shareholder (in this case Krach) to executives (in this case Mueller) must be treated as expenses paid on behalf of the company. This is to prevent lower costs being used to improve a company's results, and hence bolster its share price.

Additionally, Ariba has discovered that certain stock options issued to a small number of individuals by companies acquired by Ariba during fiscal 2000, should be accounted for as stock-based compensation expense to Ariba, rather than amortized as goodwill. This will mean an increase in non-cash stock-based compensation expense, and a reduction of goodwill amortization expense will be reflected in Ariba's restated results for 2000, 2001, and 2002.

Ariba also announced that it has missed the December 30 deadline for filing its fiscal 2002 statements (10-K annual report) with the SEC, and will not do so until the completion of the review. As such, the company faces a possible delisting from Nasdaq. However, given that Ariba has a market capitalization of $855m, it seems likely that Nasdaq may bend the rules for a company this big.

Shares in Ariba fell 30 cents, or 8.6%, to $3.20 as of 5pm GMT on the Nasdaq Stock Market.

Combat fraud and increase customer satisfaction

More from The Register

next story
Audio fans, prepare yourself for the Second Coming ... of Blu-ray
High Fidelity Pure Audio – is this what your ears have been waiting for?
Record labels sue Pandora over vintage song royalties
Companies want payout on recordings made before 1972
Zucker punched: Google gobbles Facebook-wooed Titan Aerospace
Up, up and away in my beautiful balloon flying broadband-bot
Apple DOMINATES the Valley, rakes in more profit than Google, HP, Intel, Cisco COMBINED
Cook & Co. also pay more taxes than those four worthies PLUS eBay and Oracle
Intel sees 'signs of improvement in the PC business' but earnings remain 'Meh...'
Prospects for the future, however, please Wall Street money men
What's a right pain in the ASCII for IBM? Its own leech-like hardware biz
Keep your eyes on our cloud while we remove this pesky thing, say execs
prev story

Whitepapers

Mainstay ROI - Does application security pay?
In this whitepaper learn how you and your enterprise might benefit from better software security.
Combat fraud and increase customer satisfaction
Based on their experience using HP ArcSight Enterprise Security Manager for IT security operations, Finansbank moved to HP ArcSight ESM for fraud management.
The benefits of software based PBX
Why you should break free from your proprietary PBX and how to leverage your existing server hardware.
Top three mobile application threats
Learn about three of the top mobile application security threats facing businesses today and recommendations on how to mitigate the risk.
3 Big data security analytics techniques
Applying these Big Data security analytics techniques can help you make your business safer by detecting attacks early, before significant damage is done.