An internal investigation of accounting practices at Ixia shows that the company’s officers did not engage in widespread fraud, setting the stage for the company to regain Nasdaq compliance.
The Calabasas company, which makes computer networking software, was rocked in October by resignation of Chief Executive Vic Alston for falsifying his resume. Because of the turmoil, the company failed to report its financial results to shareholders for the third quarter.
The investigation, conducted by the board’s audit committee, found that although Alston had misstated his academic credentials and employment history, he did not lie about the company’s financial results. Also, Tom Miller, the former chief financial officer, didn’t engage in intentional misconduct.
However, a lack of leadership and insufficient controls combined to produce errors in the company’s revenue results, the investigation found. The problem affected financial statements for late 2012 and early 2013, but the committee estimates the change in stated revenue for the affected quarters would be between zero and 3 percent.
With the investigation complete, the company is trying to file its financial statements before a March 18 deadline.
“The company is currently working to file the Form 10-K as soon as possible,” Ixia said in a statement. “There can be no assurance, however, that the Form 10-K and the audit of the company’s financial statements to be included therein will be completed by that date.”
The investigation results were released late Tuesday. Shares closed Wednesday up $1.45 or 11 percent to $14.53 on the Nasdaq.