Ceridian Corp., a provider of payroll processing and human-resource services, announced that it will restate its financials for five years from 1999 to 2003, as well as for the first quarter of this year, to make accounting adjustments.

The company added the revisions would reduce pretax earnings by $60.2 million, $52.6 million of which relates to capitalized internally developed software. In July, Ceridian said it needed to postpone its second-quarter earnings release in response to a concern raised internally regarding the capitalization and expensing of certain costs in its U.S. Human Resource Solutions business.

Ceridian stated that its audit committee determined that there were deficiencies in the policies and practices for the capitalization of internally developed software, the commencement of amortization of capitalized software development costs, and the accrual of expenses at the end of a quarter. “The investigation concluded that the company’s capitalization practices were, in certain respects, not consistent with GAAP and that the training and controls around capitalization and expense accruals needed to be substantially strengthened,” it added in a press release.

“Our internal controls fell short,” said chief executive officer Ronald Turner on a conference call, according to Reuters. “We will implement measures and controls that will insure disciplined reporting, a disciplined compliance structure and severe sanctions for noncompliance.”

The company stated that it has already implemented certain remedial actions, including the adoption of a corrected capitalization policy for internally developed software, and that is in the process of implementing new and improved internal controls.

Ceridian also said it anticipates that certain personnel changes will be made in the future, although it did not provide further details.