Symantec said its Audit Committee has completed the internal investigation into the company's accounting practices started in May. The main finding was a contract recognsied as revenue in the fiscal Q4 to March will need to be restated mainly as deferred revenue, according Telecompaper. After finding several shortcomings in implementation of the company code of conduct, the company has also adopted a number of recommended governance changes, such as appointing chief accounting and compliance officers and revising the code of conduct.
Symantec launched the investigation in May, assisted by independent legal counsel and a forensic accounting firm, based on allegations raised by a former employee. The company remains subject to a separate investigation by the US financial regulator, the SEC.
The main change to past figures resulting from the Audit Committee investigation involves a transaction with a customer for which USD 13 million was recognized as revenue in the fourth quarter of fiscal year 2018. The company has concluded that USD 12 million of the amount should be deferred, and the previously announced financial results for the fourth quarter and following first quarter will be restated accordingly.
The Audit Committee also identified "certain behavior inconsistent with the company’s Code of Conduct and related policies", Symantec said, without specifying further. The Audit Committee referred these matters to the company, and Symantec said it intends to take "appropriate action". It added that no so-called Section 16 officers, which refers to top executives and shareholders, would be subject to employment actions.
The Audit Committee proposed and the Board of Directors adopted other measures as a result of the investigation, including appointing a separate Chief Accounting Officer; appointing a separate Chief Compliance Officer reporting to the Audit Committee; clarifying and enhancing the Code of Conduct and related policies; and adopting certain enhanced controls and policies related to the matters investigated.
Due to the internal investigation Symantec has not filed its annual report for the year to March or its Q1 report with the SEC yet. The company said it aims to complete these filings by the end of October.
