Microsoft's accounting under scrutiny

Article Abstract:

Microsoft Corp. has announced that the Securities and Exchange Commission is investigating the firm's accounting practices concerning the reporting of financial reserves. Experts believe the investigation is part of the S.E.C.'s effort to halt 'cookie jar' accounting, by which companies can smooth over differences between strong and weak quarters. Microsoft continues to deny any such intent and claims it has stuck to 'conservative' accounting practices. Greg Maffei, Microsoft's senior vice president and chief financial officer, suggested that the agency began its inquiry in January as a response to a wrongful discharge suit filed by a formal internal auditor at Microsoft, Charles Pancerzewski. The lawsuit, filed in 1996 and settled last November under terms that were not disclosed, alleged that the software firm had manipulated hundreds of million of dollars in revenue reserves to make its profits look more stable. The S.E.C. has started clamping down on what they perceive to be earnings manipulation by many firms. The agency has taken a strong stand against various accounting practices that may allow companies to smooth over their earnings results. In the case of Microsoft, the company may have reported too much of its revenue as reserves, thereby understating its profit.

United States, Computer Software, Financial management, Software, Microsoft Corp., Accounting and auditing, Company sales and earnings, Company earnings/profit, United States. Securities and Exchange Commission, Reserves (Accounting), Financial misrepresentations, Financial misrepresentation

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Data-secrecy export case dropped by U.S

Article Abstract:

The US Justice Department has dropped an investigation into Phil Zimmermann and the distribution of his Pretty Good Privacy encryption software without giving any reason for the decision. The move brings an end to a three-year investigation, which was launched in 1993 after the program had appeared on the Internet in 1991. Pretty Good Privacy's encryption technology is classified by the government as a weapon and as such has severe export restrictions. The government's regulation stems from its interest in monitoring the activities of hostile foreign governments or criminals abroad. Once on the Internet, the program could be downloaded anywhere in the world. Zimmermann created the program in an effort to reduce the cost and difficulty involved in sending an encrypted message, but he maintains that he did not place the program on the Internet. No legal precedent exists for determining whether placing the program on the Internet is actually a violation of export law.

Data Encryption Software Pkgs, Usage, Laws, regulations and rules, Internet, Encryption software, United States. Department of Justice, Distribution, Network security software, Security software, Systems and data security software, Government Regulation, Systems/Data Security Software, Investigation, Pretty Good Privacy (Systems/data security software)

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