SEC probes RSA Security accounting practice

[InfoSec News <isn () c4i org>]

http://www.theregister.co.uk/content/7/23846.html

By John Leyden
Posted: 28/01/2002 at 14:14 GMT

The Securities and Exchange Commission (SEC) has launched on
investigation into accountancy practices at RSA Security.

In a statement issued last Friday, RSA said that the SEC was looking
at how it disclosed a change in the way it recognised distributor
revenues.

> From Q1, 2001 revenues to distributors were accounted for on shipment
rather than when disties sold security software onto the channel.

The SEC will investigate whether this change should have been have
been disclosed in RSA's Q1 earnings press release as well as "certain
trading in the company's securities".

RSA has stated that the investigation will not require any change to
its financial statements. The firm said it intended to fully
co-operate with the SEC in its enquiry.

Confirmation of the SEC investigation came after RSA announced Q4,2001
revenues were $63.0 million, compared to $78.1 million for the fourth
quarter of 2000. RSA reported a net loss of $10.1 million for Q4 2001,
compared to net income of $103.9 million for the fourth quarter of
2000.

Stocks in the company fell to $11.86 by close on Friday, down from $18
earlier last week.



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