This article was updated at 2:45 p.m. PDT.
Dell concluded an internal investigation into its accounting procedures Thursday and found that three years' worth of quarterly earnings statements were improperly adjusted, and senior executives knew about it.
Which executives knew isn't clear yet. A Dell representative said the company is "taking responsibility as a team" and isn't naming names.
According to a statement released by the company, the investigation yielded evidence that "certain adjustments appear to have been motivated by the objective of attaining financial targets," and usually took place at the end of a fiscal quarter. Adjusted account balances were "reviewed, sometime at the request or with the knowledge of senior executives," according to a company statement.
Dell says it will restate earnings filed between 2003 and 2006, and plans to refile with the SEC the first week of November. The cumulative change to Dell's bottom line for the entire period will be between $50 million and $150 million, and earnings per share will be reduced by 2 to 7 cents per share.
The earnings statement from the first fiscal quarter of 2003 and the second fiscal quarter of 2004 will require the most restatement, requiring reductions of between 10 and 13 percent in net income. Earnings from the fourth quarter of fiscal year 2005 will be reduced by 7 percent. But net income for the second quarter of fiscal 2005, and the third and fourth quarters of 2006 will actually be bumped up by 5 to 7 percent.
The company's internal audit committee first announced its preliminary findings in March and said it found "evidence of misconduct." Dell first revealed that it had come under the scrutiny of the SEC last August.
An accounting scandal is another blow to Dell, which has beenand has seen an exodus of its top executives in the last year, which may or may not be directly related to the outcome of Dell's or the SEC's probe of its accounting practices. CEO Kevin Rollins left in January and was replaced by former CEO and founder Michael Dell. Rollins' departure was preceded by the exit of Jim Schneider, Dell's chief financial officer, who also left in January.
Dell is holding a call with investors regarding the news, so stay tuned for more this afternoon.