Peregrine Systems has dismissed its auditors KPMG following the news that some of the company’s $100 million in restated revenues had come from business dealings with KPMG and its consulting division. KPMG had to be replaced so as not to compromise rules regarding auditor independence.
KPMG had only taken over from Arthur Andersen as company auditors in April, after the detection of the $100 million in sales revenues that required restating. Peregrine had announced earlier in the year that it anticipated around three years of earnings reports would also have to be restated, due to alleged accounting errors and irregularities.
The SEC has also begun to investigate the accounting practices of Peregrine Systems. This followed the news that the accounts of most software companies were to be scrutinized, due to problems caused by the way that they recognise revenues. The SEC is currently probing Computer Associates as well as Peregrine.
Peregrine’s financial problems are the latest setback for the company that lost both its CEO and CFO earlier this month.