A four-year probe by the Securities and Exchange Commission into Computer Sciences Corp. bookkeeping is over, thanks to a settlement that will cost the company $190 million and require a review of its policies for compliance with accounting regulations.
The Falls Church company will record a pre-tax charge of about $200 million for the penalty and related expenses in its third quarter of fiscal 2015. The review will be conducted by an independent compliance consultant, according to an SEC administrative enforcement action disclosed Monday by CSC.
The SEC says CSC violated the antifraud, reporting and books-and-records provisions of the U.S. securities laws, according to the filing. The inquiry involved the company’s reporting of margin, which in turn contributed to the amount of profits reported.
CSC neither admitted nor denied the allegations but agreed to cease and desist from committing or causing any violations or future violations of those provisions.
In addition to the penalty, CSC will restate its financial statements for fiscal 2012 and its summary financial results for fiscal years 2011 and 2010. The company said that will be immaterial to the company’s current and future financials.
CSC has previously acknowledged what it described as “historic errors and irregularities” relating to accounting by the Nordics region in Australia and under the company’s troubled contract with the U.K. National Health Service. It has since adjusted some financial statements; reprimanded, suspended or terminated personnel involved; and implemented additional controls.
The settlement comes about a year after talks between CSC and the SEC failed to result in any resolution and CSC requested the SEC not to pursue enforcement proceedings.
Shares of CSC (NYSE: CSC) saw a modest uptick after the company reported news of the settlement, trading at about $64.50 a share Tuesday afternoon, compared to $64 Dec. 26.
