Microsoft has settled a investigation into its accounting practices that will prevent the firm from using "cookie jar" methods, authorities said.
The deal with the Securities and Exchange Commission will stop Microsoft from understating earnings in strong times so the reserves could be used later to boost revenues during weak times, according to the SEC.
"Public companies must ensure that their accounting is substantiated in the first instance by factual bases and well-reasoned analyses and conclusions," said Stephen Cutler, director of the SEC's enforcement division.
The settlement order came after negotiation talks and an SEC investigation that lasted more than two years. The company is not required to pay a fine or admit wrongdoing.
Microsoft acknowledged the settlement in a statement today but did not provide details.
The company said the settlement requires it "to make accurate filings and maintain records and controls sufficient to prepare financial statements in conformity with Generally Accepted Accounting Principles."
AFP