Examining the company purpose of Computer Associates Technologies

Category: Accounting

Describe the company's purpose. Evaluate whether the company has a clear purpose and propose how the company's purpose can be improved.

The company purpose enshrines in the mission statement reveal a determined passion to outdo and remain as a company with leading deliverance of committed customer satisfaction. The purpose of the mission statement is clear but it can be further elucidated by stating the quantifiable objective such as improvements on sales of 20% or operating profit of 15%.

Computer Associates Technologies is a supreme e-business software company. CA offers various enterprise systems management, information management, and business applications solutions to a variety of organizations. CA develops and delivers software and services that help organizations to manage and secure their IT infrastructures and deliver flexible IT services. Computer Associates markets and affirm homogeneous software products to use with a broad range of desktops, midrange and mainframe computers from many different hardware manufacturers. They distribute markets and support its products on a worldwide basis with its own employees and a network of independent value added resellers, distributors and dealers.

CA Technologies mission is to revolutionize the way IT powers business agility, eliminate the barriers to delivering IT services in faster, more flexible and more sustainable ways; bridge the IT environments of today to those of tomorrow; break the tradeoffs' between IT that is highly reliable and highly flexible; and innovate to enable IT to respond to business needs with unprecedented speed and efficiency. They have their own vision of sustainability which states what their short term goal is. To accomplish their vision they have strategies regarding how they are going to achieve. In their sustainability goals three main factors are highlighted are people, planet and profit. With considerations of these three factors they are going to reach and accomplish their mission. In recapitulate the first factor people includes promoting human rights; and ethical labour practices and encouraging the employees to build up their carrier, helping employees to build up a balance work-life and supporting the communities through investments in education, technology, health and community services and many more. The second factor planet comprises giving more attention to the planet where we live and try to minimize the effects to planet by being eco friendly. In order to attain this, they have a policy to reduce carbon prints and reduce energy, papers and waters used by the company. However, through all of this their main target is to innovating new software's with applying all these rules. Lastly to gain profit they should practice ethical and transparent corporate governance and take the advantage of sustainability opportunities and be lead in the cloud.

CA Technologies core purpose is to provide quality products and services to enhance the clients' business practices and facilitate the organisational goals. Their main prominent is to support the business relationship by actively listen analyse and develop strategic response to the wants and needs of their clients. In order to achieve this within the company they follow a relaxed, friendly atmosphere which helps to promote explorations and discovery and energetic work force. Over all in CA Technology their main purpose and what they want to achieve is clearly mentioned in there various planning reports and annual reports. However, it would be more contented if they have indicated how much of profit or how much percentage they want to attain within certain time period.

Describe the perceived corporate culture that the company practices.

The culture that is perceived by CA Technology is strong. Their cultures which keys values are deeply and widely held. CA's stands values are known as the spirit of the company's culture and channel to their behaviour daily. They encompass a significant message to the community. It instigates them both as a company and a team to motivate and drive to greater altitudes of achievement. In short CA people do care and work hard to make sure for their customers' success. Within the company itself they constantly look and take measures to innovate and improve. They take every opportunity very critically and work solid for it. Inside CA Technologies they have their own quality improve measurement plans and take actions based on facts. By this they are able to do and have a superiority work.

In CA the employees are give a great amount of trust. They do respect people and world where they operate.CA is committed to conducting business with the highest integrity and delivering shareholders value to produce innovative software that transforms the way people manage their business. They build meaningful relationship with all of their stake holders through their own way of unique concept of dealing, collaboration and respect.CA Technologies is a stable company because they have a very good communication in decision making among the board members. They also have a stable price of share in the share market. CA Technologies have got exceptional team direction because decision making among board members are organise among the board members and not by a single individual. The company has outstanding people orientation. This is because the board member encompasses re-election, nomination and remuneration in their management. They provide attractive remuneration for the board members. The company pays excellent consideration to details because they have precise accounting details. The company also practice corporate governance in accordance with the United States of Corporate Governance and Accounting Standards. The company also has strong influence on organizational members and has a clear clarity of cultural values and beliefs. The benefits of having strong culture are shown in CA Technologies stronger employee Commitment Company. The company provides the employees and directors with excellent salary packages. The company recruits new employees or fresh employees in a very selective manner. New employees or even the board of directors are send for training as to keep the company's name up held. The company also helped employees and directors to have a continuous education programs to keep them competitive and reliable at all times and also they have the nature of generating future IT innovators to the public. They also do have customer success program which helps to establish strong relationship with CA with its customers .As a culmination, CA practices excellent organizational culture which is strong and reliable to their stockholders.

Evaluate whether the company practices good corporate governance

In CA they have their own Corporate Governance Committee (CGC) in which the main purpose of the CGC is to assist the Board in fulfilling its responsibilities with respect to their governance, such as making acclamations to the Board concerning. The last fiscal year, which is 2010 the Corporate Governance Committee met 11 times where as the Board of directors met 10 times. During these meetings the directors unanimous written consent on three occasions. The independent directors meet at all regular Board meetings in executive session without any non-independent director present. During fiscal year 2010, either the non-executive Chairman of the Board or the Lead Independent Director, each of whom was an independent director, presided at these executive sessions. During fiscal year 2010, each director attended, in the aggregate, more than 75% of the Board meetings and meetings of the Board committees on which the director served.

From time-to-time, the Board also establishes special committees to assist the Board in carrying out its responsibilities. During fiscal year 2010, the Board established two active informal committees. The Board established a CEO Search Committee to assist the Board in identifying and screening candidates for the position of Chief Executive Officer of the Company. The CEO Search Committee, whose responsibilities concluded with the appointment of Mr. McCracken as Chief Executive Officer, consisted of Messrs. Fernandes (Chair), Weinbach and Zambonini, and Ms. Koplovitz. The Board also established an M&A Committee to review and approve certain acquisitions and divestitures. The current members of the M&A Committee are Messrs. Weinbach (Chair), Bromark, Fernandes, Lofgren, Sulpizio and Zambonini.

The Board of Directors of CA Technologies sets high standards for the Company's employees, officers and directors. Implicit in this philosophy is the magnitude of excellent sound corporate governance. In CA Technologies it is the function of the Board of Directors to provide as a cautious fiduciary for shareholders and to oversee the management of the Company's business. The Board of Directors follows the procedures and standards in order to fulfil their responsibilities and duties

Do you think the company should be more socially responsible? Explain your reasoning. Propose to the company what should be done to improve on its social responsibility

CA Technologies practices good consciences of the organization. They support programs around the world that support social services, encourage health and wellness, and deliver aid and response during times of disaster. When a business is socially responsible they are able to ascertain a vigorous customer relationship with their consumers as well as maintain a strong consumer value. Today, copious organizations adopt social responsibility policies because of numerous motives. Therefore without any trepidation the answer is 'YES' that any company should be socially responsible to the society. In encapsulate socially responsible is that the company is sentient of its place in the local economy and ecology, and the greater human society. It depict maturity, reliability and creates a sense of "doing good" in people who work for and do business with that company. Being socially responsible provides advantages to CA Technologies such as having a high employee spirits and also it has a positive impact on the organisations performance. This helps CA Technologies to be a successful and effective business and delivering high quality products and services that sustain a high quality environment.

The CA have their own environmental and social responsibility policy which help to maintain quality management system .The main principle of implementing such policy in CA is to reduce the environmental impact and support the communities in a means which also foster economic growth and business success. CA Technologies boost initiatives to scrutinize and curtail resource diminution, main focal centre is on sustainable resources and lessen and recycle waste and other activities which adversely impact the environment. They also practice returning some of the profits to the society by encouraging plans that progress education, technology, health and community services as well as the advancement of women in IT. Since 2008, CA Technologies has supported the Anita Borg Institute for Women and Technology (ABI), an organization which is dedicated to increase the influence of women on all aspects of technology and increase the positive impact of technology on women. CA Technology have given total of $1.7 million for software and financing donations since 2005.Besides this in a press release on May 2011 it says that they are spending $1million for scholarship in order to train the young IT trainers to work in this framework environment. They have given a huge commitment and importance to develop and conserve a prolonging and environmentally responsible mode of operation, within the context of its institutional mission, fiscal constraints and responsibilities to its employees and the local communities in which it operates. This commitment to environmental responsibility is intended both to educate the employee population about environmental issues and promote environmentally sound policies and procedures. Due to these policies today CA Technologies have ranked among the top 50 Greenest US companies which shows that they are doing favourable.

Conversely while CA technologies chose to be socially responsible it should focus on whether it meets their goals. Being socially responsible is expensive and many companies are wasting money if their industry has no interest in being socially responsible. Also, if starting a business one should incorporate the social vision within their business model, recruiting, and even sales. Business will spend more on being social later. Socially responsible business should create granular changes each year and allows for the enterprise to develop into being socially responsible.

As a whole CA Technologies follows and practice well sociably responsible to the community as well within the company. They have their own policies and every one of the companies should follow it if they are working in the company. This allows having fair treatment of employees'. By this it also helps to conduct ethical business within the company. Even this overcomes and makes the company to be highly respected with equal chance the employees to motivate and assists in organisation to reap a competitive advantage. Further the modern organization believes that using business strategy as a tool for social and environmental change is an efficient way to integrate social goals into organizational objectives. Besides, some stakeholders do not just prefer that an organization is socially responsible, but insist on dealing with responsible companies.

Comment on the financial performance of the company during the last three years.

As we see from the above figures CA Technologies has had a more stable and healthy financial position compared to the last two years. The company sales and operating are on a steady increase from 2008 to year 2010 even though in 2009 its sales decrease to $6 million and operating profit decrease to $17 million. The decrease in 2009 revenue was mainly due due to an increase in the annual value of existing customer contracts, and also due to unfavorable foreign exchange variance .Regardless of a slight dip in revenue in 2009 the operating profit decrease $17 million from the year prior. For 2010 their profit is weaker than expected because of the weakness in its Internet security business. The net income has been on a relative rise over the years.

The net income for year 2010 is rapidly increased over the past 2 years. This shows CA had a good financial year in 2010. Cash balance at financial year 2010 was relatively low compared to year 2009 and 2008. But 2008 had the strongest cash balance for the past three years. Year 3 has recorded a medium cash balance. The company's current asset has been declining over the years. Fiscal year 2008 recorded the highest current asset owned by CA while year 2010 recorded the lowest. The current liabilities also decrease, this shows the company had to be held less liable to its liabilities. Total debt of the company is on a steady decrease, the company does not have much debt. However Total equity has been on a steady increase. This shows that most assets like profit, cash and other equities are higher. Furthermore, cash flow from operations is relatively high on year 2009 and much higher in the year 2010. Cash flow from investing is much higher in year 2010 compared with year 2009 and 2008. Lastly, cash flow from financing is the lowest in year 2008 and the highest in year 2009 compared with year 2010.

Do you think the company's sales and profits will continue to grow in 2011-2012? Explain.

The company sales and profit should grow because of the high invest made in to their product improvement. In April 2010 CA Inc announced that they are going to cut 1,000 jobs (Bloomberg 2010) which is actually about 8% of the workforce and is going to strengthen a vague number of facilities for component of a streamlining preparation to trim down costs and be converted into more efficient. This shows that company is heading towards to be more efficient and utilising its recourses in the most profitable way. They have their own plan which they want to achieve in the near future .So CA knows what they are doing and what are the measures to be taken to attain their plan. As clearly seen in their annual report for the past five years their sales is increasing as a balanced level and in 2010 they have spend huge amount in investment compare to previous year which shows that in near future CA would be able to see a wealthy gain from their investment. Additionally, the annual report release on this may for its fiscal year 2011 it shows there sales raise to 5% compare to last year. Therefore, it can be concluded that for the next two years CA profit is going to grow further and able to earn more profit.

CA Technologies has had a highest closing price during 27th April. This is because more stockholders are trusting in CA stocks. The stockholders realise CA is strong in the New York main market. The average closing price for the month April is 24.12. This shows that for the past April month CA did not have many fluctuation in its closing price, it was merely just an increase in the range of 6 cents or a decrease in the range of 6 cents. The lowest closing price is 23.60 on the 18 April. During this date, the company had minor fortune amongst the trade of shareholders.

source:stockmarket (nasdqua)

For the past five years ended stock price for CA Technologies was illustrated in the table.


Year ended stock price ($)











Write-up on the case findings on accounting scandal that was involved with conclusion and recommendations

Computer Associates, Inc is the world's fourth largest independent computer software company in the world. It was conceived in 1976 as Computer Associates International, Inc by Charles B. Wang and with his other partner Russell Artzt. The company was formerly recognised as CA, Inc and in May 2010 its names was change to CA Technologies. When CA decided to launch its own business in the United States Charles B. Wang saw an opportunity and in 1976 started Computer Associates International as a joint venture with the Swiss company. For the past three decades CA Technologies have been helping to manage information technology for vast of companies.

After the starts up, Computer Associates began flourish, by undertaking salespeople and programmers which allow him to buy out the original Swiss company in 1980s.After that in 1981, the company went to public by allowing the general public to buy shares and helps to develop the business further by remerging funds through issuing shares. All the way throughout its gigantic history they grew hastily thorough acquisition and taking over their rivalry firms which makes the company to be stronger in the software business market. During 1987, Computer Associates made its tremendous purchase yet, acquiring rival Uccel for about $830 million in stock. The purchase had made CA Technology as the largest independent software company, ahead of Microsoft. Via acquisitions' CA had brought financial strength and a broad range of software to the market which enables them to stable in the market against the rivalries. In 1989 CA become the first software firm to be in the top $1 billion sales due to the acquisition they took place with Uccel and Cullinet. Again in 1995 CA makes its massive takeover to deal in software industry which the turnover worth $1.78 billion to acquire its competitor Legent Corporation.

During 2000 heaps of changes took place in CA Technologies and have to go through lot of challenges. In August 2000, Charles Wang step out from the CEO position and this position was given to his colleague Sanjay Kumar and Charles remained as a Chairman. After Sanjay Kumar was given the position of CEO he dedicated to grow the business without more acquisitions. In October 2000 they changed its accounting practice which can be said as one of CA's accounting problems that took place over its long existence .Due to this CA ended up with two set of numbers which was confusing and so in 2002 SEC was prompted to investigate CA bookkeeping. By following the new method CA planned a $1 billion bond offering in February 2002 that would have financed some of the company's $3.5 billion debt to a more favourable rate.

Fiscal year 2000, which ended in 31 March 2000 various CA officers and executives betrothed in a complete, company-wide practice of fallaciously and unfairly illegal recording and reporting within a fiscal quarter revenue associated with certain license agreements although those license agreements had actually not been tied up and signed during that quarter. The practice was referred to within CA as the "35-day month" or the "three-day window," which violated GAAP and resulted in CA's filing of materially false financial statements. The fundamental target of the 35-day month practice was to authorize CA to report that it met or exceeded its projected quarterly revenue and earnings when, in truth, CA had not met its projected quarterly revenue and earnings. As a result of the practice, CA reported falsely to investors and regulators during numerous fiscal quarters, including each of the four quarters of CA's fiscal year 2000 that it had met or exceeded its consensus estimates. In fact, in each of the four quarters of fiscal year 2000, CA improperly recognized and falsely reported $100 million of revenue associated with numerous license agreements that had been finalised after the quarter close. So by this CA made misrepresentations and omissions of material fact which were relied upon by members of the investing public.

In 2000-2001, Computer Associates, the third-largest independent software company in the world, was involved in a $2.2 billion accounting scandal which known to public in 2002. The president of computer associates Sanjay Kumar had wrongly reported more than $500 million in revenue in its financial year 1998 and 1999.Because of his action the stock price of CA has artificially inflated and the investors who bought the shares during that time earned losses. Besides this the accounting fraud of CA involves restating its financial results from 2000 and 2001 in April which reflects $2.2 billion in revenue which was improperly booked. (msnbc.com, 2004)During the investigation of this case the three former executives of Computer Associates International Inc. (CA) admitted that month they fraudulently recorded $100 of million worth of contract in a conspiracy to inflate quarterly earnings. They have pleaded guilty to securities fraud, as federal prosecutors continue to investigate the company. Referring to New York Times report Ira H. Zar, the former Chief Financial Officer, and Mr. David Kaplan and Mr. David Rivard, both former Vice-Presidents of finance at Computer Associates (CA) have entered their guilty plea. According to SEC during the company's fiscal year 2000, Computer Associates "prematurely recognized" more than $1.4 billion in revenue from at least 116 contracts that had not yet been signed.

The employee of the Computer Associates has practice of "cleaning up" copies of backdated license agreements before providing copies of the agreements to CA's outside auditors. This included, removing from license agreements, facsimile stamps and other notations which showed the true date on which the agreements were finalised. So that auditors would see that the paperwork confirmed the company's claims. This practice was designed and executed so that CA could falsely record and report revenue associated with license agreements finalized after the end of fiscal quarters. At that time the outside auditors of CA Technologies was Earnest and young. whereas after the this lawsuit corporate scandals their independent audit firm changed to KPMG.

In each of the four quarters of CA's fiscal year 2000, CA executives collectively determined that the total revenue generated for the quarter by the end of the flash period was less than needed to meet the consensus estimate. Even they also negotiate and finalise additional license agreements, which were backdated to disguise the fact that the agreements had been finalised after the end of the fiscal quarter. CA then fraudulently recorded and reported in the earlier quarter revenue associated with the backdated agreements. As a further part of the 35-day month practice, certain CA officers and executives concealed the existence of the practice from CA's outside auditors.

For the First Quarter consensus estimate was that CA's earnings would be 47 cents per share. However when the First Quarter ended on June 30, 1999, CA had not generated sufficient revenue to meet the estimate. Therefore, CA improperly recognized revenue associated with approximately 22 license agreements having an aggregate GAAP Value of approximately $240 million. Out of this total, approximately $120 million was associated with license agreements signed by CA customers after June 30, 1999, while approximately $120 million was associated with license agreements countersigned by CA after June 30, 1999. The improperly recognized revenue represented approximately 20% of CA's reported revenue for the First Quarter. On July 20, 1999, when CA filed with the SEC its quarterly report on Form 10-Q and press release CA falsely reported its quarterly financial results. For these public documents CA reported revenue included revenue associated with license agreements finalized after June 30, 1999. Through its false filings and statements, CA reported earnings per share of 49cents exclusive of non-recurring charges and thereby created the false and fraudulent appearance that CA had exceeded the consensus earnings estimate for the First Quarter by two cents per share.

For Second Quarter the estimate was that CA's earnings would be 59 cents per share. However, when the Second Quarter ended CA had not generated sufficient revenue and so they improperly recognized revenue associated with approximately 58 license agreements having an aggregate GAAP Value of approximately $560 million. Of this total, approximately $470 million was associated with license agreements signed by CA customers after October 30, 1999, while approximately $90 million was associated with license agreements countersigned by CA after October 30, 1999. The improperly recognized revenue represented approximately 35% of CA's reported revenue for the Second Quarter. On or about October 19, 1999, CA filed with the SEC its quarterly report on Form 10-Q and issued a related press release. In these public documents, CA falsely reported its quarterly financial results, in that CA reported revenue for the Second Quarter that included revenue associated with license agreements finalized after September 30, 1999. Through its false filings and statements, CA reported earnings per share of 60 cents exclusive of non-recurring charges and thereby created the false and fraudulent appearance that CA had exceeded the consensus earnings estimate for the Second Quarter by one cent per share.

Regarding .The third quarter CA agreed estimate was CA's earnings would be 90 cents per share which actually does not meet. So for the Third Quarter also CA improperly recognized revenue associated with approximately 49 license agreements having an aggregate GAAP Value of approximately $570 million. Of this total, approximately $400 million was associated with license agreements signed by CA customers after December 31, 1999, while approximately $170 million was associated with license agreements countersigned by CA after December 31, 1999.The improperly recognized revenue represented approximately 32% of CA's reported revenue for the quarter. Moreover when CA filed with the SEC its quarterly report on Form 10-Q they falsely reported its quarterly financial results, which included revenue associated with license agreements finalized after December 31, 1999. Through its false filings and statements, there earnings per share was 91cents and thereby created the false and fraudulent appearance that CA exceeded the consensus earnings estimate for the Third Quarter by one cent per share.

The fourth quarter ended on 31 March, 2000 the consensus estimate was that CA's earnings would be $1.13 per share. This quarter also it doesn't meet their estimates and so to show they have meet their estimate they improperly recognized revenue associated with approximately 36 license agreements having an aggregate GAAP Value of approximately $380 million. Of this total, approximately $200 million was associated with12license agreements signed by CA customers after March 31, 2000, while approximately $180 million was associated with license agreements countersigned by CA after March 31, 2000. The improperly recognized revenue represented approximately 18% of CA's reported revenue for the quarter. For the fourth quarter also when CA filed with the SEC its annual report on Form 10-K about 15 may 2000 CA falsely reported its quarterly financial results, in that CA reported revenue for the Fourth Quarter that included revenue associated with license agreements finalized after March 31, 2000. Through its false filings and statements, CA reported earnings per share of $1.13cents exclusive of non-recurring charges and thereby created the false and fraudulent appearance that CA had met the consensus earnings estimate for the Fourth Quarter.

In the beginning of 2002, the United States Attorney's Office ,the Federal Bureau of Investigation (the "FBI") and the SEC began investigations into CA's accounting practices, including whether, during the late-1990s and thereafter, CA engaged in improper accounting practices with the intent to overstate its fiscal quarterly revenue .After the investigation SEC found that the format began in 1998, perhaps earlier, and persistent all the way through September 2000. For this, the company hastily reported $3.3 billion in revenues from 363 software contracts which are against and violating Generally Accepted Accounting Principles, or GAAP (U.S Securities and Exchange Commission 2004) .In GAAP it states revenues should not be counted until both parties have properly signed a contract. The SEC said the goal was to meet or beat per-share earnings estimates of Wall Street analysts, a key to keeping a company's stock price rising. However from entire quarters most extreme incident was the second quarter of 2000, when the company reported $557 million in revenues beyond the $1.047 billion it could properly. Even in 2001 second quarter it shows a net profit and a loss which is quite puzzling. The document they release to the public it shows net loss of $291 million (The New York times, 2001) for the second quarter but its revenue rose from $1.442 billion to $1.397 compared to last year.

In February 2002, CA retained a law firm Government Investigations. Through the Company's Law Firm, CA represented to the United States Attorney's Office, the FBI and the SEC that it was committed to cooperating fully with the Government Investigations. Additionally, in a press release issued on February 20, 2002, CA denied that it had engaged in any improper accounting practices, declaring: "The reporting of our financial results has always been in accordance with applicable accounting principles."

In Computer Associates large segments of executives' compensation depend on meeting particular goals. The Inflated figures in Computer Associates meant executives were paid more than they should have been - extra compensation that came from shareholders' pockets. Likewise, executives at Computer Associates were big shareholders themselves, and many held enormous lumps of stock preferences. They therefore had a big financial stake in the share price, and thus an incentive to inflate results earnings.

On February 22, 2002, CA Technologies has officially confirmed that it was conscious that both the Securities Exchange Commission and the Federal Bureau of Investigation Federal Bureau of Investigation (FBI), division of the U.S. Dept. of Justice charged with investigating all violations of federal laws except those assigned to some other federal agency.  were inspecting the Company's accounting for civil, and in the case of the FBI, criminal violations. The announcement of this news which began to surface on February 20, caused investors to take off the stock, causing the share price to fell from a February 19 closing price of $25.31 to a February 22 close of $15.99, a drop of 36.8%.

The victims in the case were the shareholders who were led to believe the company was more profitable than it was. They paid more than they should have for the stock, or kept in when, had they known the truth, they would have sold. These shareholders suffered enormous losses once the practices were revealed. When the company stopped the practice at the end of the first quarter of 2001, it fell short of the Wall Street earnings estimate and the share price fell by more than 43% in a single day. Shares currently trade around $27, down from more than $71 early in 2000.During March they appoint two outside directors (The New York times, 2011) to its board regarding the removal of some of its executive members.

In April, 2004, in the face of a well publicized accounting scandal, Kumar stepped down as CEO, and in May, Kenneth Cron was nominated for the interim CEO. After Sanjay Kumar resign in November 2004 John Swainson, an IBM veteran, was appointed as the CEO of Computer Associates. The charge against Sanjay Kumar was revealed after The Company has agreed to pay $225 million for the settlement to shareholders. There was another class of victims as well - employees. Late in September, the company said it would trim its workforce by 800 people, or 5%, in order to pay the $225 million settlement after the whole investigation of CA fraudulent case he was sentences in November 2006 to 12 years in prison for his role in committing a $2.2 billion accounting fraud at the computer software company. Along this CA Company itself have spend $30 million on its own investigation led by the former chief accountant for the SEC, and in responding to inquiries from regulators and prosecutors. Additionally with reference to New York Times on May 26, 2004 CA Inc offers $10 billion to settle a two years government investigation in to their accounting practices.CA Inc have said that the government haven't yet accepted nor rejected their offer. During April 2004 after they found in internal investigation that the sales were prematurely booked they restate its revenue for 2000 and 2001.However ,after all those investigation, CA Inc with hold in the software market by cost cutting and strong sales of security software which result for 2004 quarterly profits doubled. Their revenue rose to 9% which is $911 million (The New York times, 2011) compare to last quarter.


CA Technology suffers a corporate governance scandal when its CEO and head of sales admitted to a huge accounting fraud that took place between 1998 and 2000.Therefore organizations like CA Technology who is mostly involved in software business market they should need to implement a system which will enable them to keep track of their data. They should put in to place good records management system so that regulators would be able to find the information they needed. They should follow a good corporate governance within the company and make the employees aware of these scandal. Also implement good ethical and cultural beliefs to maintain an honest environment.