Master Case Assignment 7

Master Case Assignment 7 - CEG GSB 703 Master Case...

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CEG GSB 703 Master Case Assignment #7 Adam Ohanesian Email: [email protected] Table of Contents I. Introduction II. Background III. What CA tried to accomplish by changing business model a. How changes accomplished goal b. Risks IV. Change in accounting fit with new business model a. Conservative V. My feelings towards pro forma earnings numbers a. Disagreement b. Reasoning why VI. Action plan for Sanjay Kumar a. Revert back b. Benefits VII. CA after the case VIII. Conclusion/Recommendation
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Computer Associates Inc. made a controversial change to its business model. It also changed its accounting principles to match its new business model. However, when the accountants revealed declining revenues and earnings, Computer Associates Inc. was challenged by investors. The issues faced by Computer Associates Inc. are that the company has changed it s business model and needs a change in accounting principles to coincide. Another issue is that the revenues and profits of Computer Associates Inc. are declining. The last issue, is that the change in accounting has been perceived to be fraudulent by investors who have challenged the management and has questioned their integrity. Despite the changes in financial reporting and changes in their business model, Computer Associates Inc. has been viewed in bad light. First, Computer Associates Inc. has come in for some harsh criticism in the financial press. For example from the New York Times “As measured by standard accounting rules, Computer
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This note was uploaded on 09/02/2011 for the course GSB 703 taught by Professor Girardin during the Summer '09 term at Nichols.

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Master Case Assignment 7 - CEG GSB 703 Master Case...

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