Computer Associates (CA) has admitted that it prematurely booked $2.2bn in revenue within its 2000 and 2001 financial years.
The company has restated some financial data for its 2000 and 2001 financial years in a filing to the Securities and Exchange Commission (SEC).
The restatement follows the completion of an internal audit and inquiry under former SEC chief accountant Walter Schuetze.
Schuetze's investigation discovered the company had a 'practice' of prematurely recognising revenue on software licence agreements for several years prior to adopting a new business model in October 2000.
"These practices included holding the financial period open after the end of the fiscal quarter in order to recognise revenue from contracts that were not executed by the end of such fiscal quarter," Schuetze said in a statement.
"It's important to note that the '35-day month' practice involved the premature timing of revenue recognition, not the making up of revenues. Thus, the restatement involved the movement of revenue from one quarter to another.
"This '35-day month' practice was wrong, and CA has taken and will take any remedial steps necessary."
CA, which still faces an investigation by the SEC and the US District Attorney's office of East New York, said figures for 2002, 2003 and 2004 would not be affected.
A total of $1.782bn was prematurely recognised in its 2000 financial year and $445m in 2001.
As a result of CA's investigation, nine staff have been sacked and former chief executive Sanjay Kumar has resigned from the board.
Four former executives have already pleaded guilty to related charges.
CA chairman Lewis Ranieri said in a statement: "We will continue to fully cooperate with the government. CA is implementing remedial steps and reviewing other steps needed to be taken to be sure this type of conduct doesn't happen again."
Separately, CA said Kenneth D. Cron has been appointed interim chief executive, with Jeff Clarke named chief operating officer.
Greg Corgan replaces the now departed Stephen Richards as senior vice president for worldwide sales. Kumar remains with the company as chief software architect.
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