SEC, Microsoft to Settle Accounting Allegations

The Securities and Exchange Commission has agreed to settle with Microsoft Corp. over allegations the software giant misled investors by understating revenue, a source familiar with the matter said.

Without admitting any wrongdoing or facing a fine, Microsoft will cease using the accounting practice to smooth out its earnings.

An SEC spokeswoman declined to comment. A Microsoft spokesman could not be reached. Microsoft shares fell $1.73 to $50.91 on Nasdaq.