Three former executives of Computer Associates International pleaded guilty to criminal charges related to accounting fraud and obstruction of justice in April 2004. The U.S. Department of Justice and SEC's investigation revealed a corrupt corporate culture that misled auditors and mismanaged financial records, leading to significant losses for shareholders. As a result of the investigation, the company has made efforts to improve corporate governance and compliance practices.

1. Computer Associates Case Study
Three former executives of Computer Associates International
pleaded guilty in April 2004 to criminal charges resulting from
an investigation by SEC and Department of Justice into the
company’s bookkeeping practices. Former chief financial
officer Zar pleaded guilty to charges of securities fraud and
conspiracy to obstruct Justice. Zar faces a sentence of up to 20
years for the two offenses. Two other senior financial
executives pleaded guilty to similar charges.
The U.S. Department of Justice and SEC had been investigating
the incident for two years prior to filing charges at the U.S.
District Court in New York. The complaints allege that the
account executives had committed accounting fraud by holding
the books open at the end of each quarter while recording
revenue from contracts that had not been finalized. The three
executives also misled outside auditors. In some cases, the
executives concealed their misdeeds by using contracts that
were preprinted with signature dates from the previous quarter.
The continued efforts to obstruct the government investigators
demonstrated the corrupt culture of the company and its
management as they sought to hide their misdeeds until court
documents made them public knowledge. Financial results for
the company penalized stockholders following the criminal
activity, as Computer Associates’ stock declined in value by 50
percent over the period of one year and the company’s revenues
dropped by 51 percent over two years since the disclosure of the
wrongdoing. Economic factors may have contributed to some of
the losses, but the executives’ wrongdoing certainly had the
greatest impact. A positive result of the investigation by the
Department of Justice and SEC was a renewed interest on the
part of CA to follow best practices in the future regarding
corporate governance. The company recently made changes to
its board of directors, and additional measures to rein in
corruption were planned.

2. Computer Associates Case Study
Executives of companies can be held personally responsible if
they do not keep their financial records accurately, especially if
the company is publicly traded on the stock market. The
regulations in different countries and on different markets may
affect a company's decision as to whether they want to be
publicly traded though.
Read the Case Study at the end of Chapter 11 of the textbook.
Select three reasons a company may choose to have annual
board self-evaluations to ensure that executives follow all
applicable policies.
Then answer how the New York Stock Exchange guidelines for
independence affect corporate governance.
Explain what some of the benefits and drawbacks might be if
the company was listed on the London Stock Exchange and had
to follow its guidelines. Include at least two benefits and two
drawbacks.
In addition, identify the individual contributions of each
member of the group.
Your report should follow APA style