Peregrine suffers accounting woes

SAN DIEGO - Peregrine Systems this week lost two executives and initiated an internal accounting investigation when it discovered inconsistencies in revenue reporting for $100 million the company garnered in the past two fiscal years.

In a statement, the desktop and asset management software maker said it would launch an internal investigation into "certain transactions involving revenue recognition irregularities, totaling as much as $100 million." According to the statement, "the scope and magnitude of these matters have not been determined."

Peregrine said it alerted the Securities and Exchange Commission to the potential errors and will keep the SEC informed of any findings. The company also said KPMG, the company's independent auditors, replaced Arthur Andersen in April to conduct the investigation.

Arthur Andersen earlier this year came under fire - and potential federal charges - for its suspicious accounting practices for the now bankrupt Enron. Andersen's accounting problems became public followed the Enron news and news of many top IT companies falling victim to SEC investigations. Peregrine fired Andersen in April.

Peregrine's stock dropped with the news Monday from $1.68 to 89 cents per share. The company was recently highlighted in Network World's annual list of the top companies in networking as a fast-growing company.

In the same statement, Peregrine's board also announced the resignations of Steve Gardner, chairman and CEO; and Matt Gless, chief financial officer, executive vice president of finance and also a director on the board. The board then appointed Executive Vice President Rick Nelson as acting CEO and director of the board. Peregrine also named Fred Gerson as acting chief financial officer, and Charles La Bella as executive vice president and senior counsel.