Saba has admitted that an Audit Committee has identified improper time-recording in the company’s professional services business, in some cases at the direction of supervisors. The Audit Committee also found that $271,000 of revenue was prematurely recorded in the quarter ended 30 November 2010.
The Saba Board has adopted the Committee’s findings, and is now looking into the impact of the errors on the company’s accounting and revenue recognition. The company has not yet decided if a restatement will be required of any of its historical financial results.
Saba did say however that “Until such a determination is made, the company’s historical financial results should not be relied upon.”
Internet-based financial analysts have agreed that no one is accusing Saba of intentionally trying to deceive investors and suggest that the tricky accounting issues faced by them is an indicator of some of the accounting ‘mine fields’ that software companies face when it comes to properly booking revenue.
According to Yahoo! Finance, Saba is now scheduled to report earnings on Monday with no time supplied.