Dell Inc's disclosure that executives routinely adjusted accounts to meet financial goals raises questions about the role of founder Michael Dell.

Dell, who made his return as CEO when he took over from Kevin Rollins in January, was chairman from 2002 through early 2006, when certain adjustments appear to have been motivated by the objective of attaining financial targets, according to a Dell statement. He was also CEO for three of the four years.

From an investor standpoint, the risk that Michael Dell is involved is arguably one of the most significant risks remaining in this, said Clay Sumner, an analyst at Friedman, Billings, Ramsey & Co, who has a market perform rating on shares of the No. 2 personal computer maker.

It is a risk that everyone is asking about, he said.

Dell said on Thursday it would restate four years of financial results, reducing net income for the period by $50 million to $150 million. It will reduce revenue for each restated year by less than 1 percent of the reported amounts.

An internal audit by Willkie Farr & Gallagher LLP and KPMG LLP uncovered adjustments to reserve and accrued-liability accounts, typically in the days after the end of a quarter, and other irregularities.

Sumner said Dell executives told him the founder was not implicated in the wrongdoing. If we can take Dell at its official word, Michael Dell was not involved, he said.

Dell, 42, started the company in his University of Texas dorm room in 1984 with $1,000 and set out to bypass middlemen, selling computers directly, and for less money, to customers.

His direct-to-customer sales strategy helped Dell become the world's top PC maker in less than two decades, but it began to stumble two years ago as a resurgent Hewlett-Packard Co (HPQ.N: Quote, Profile, Research) clawed back market share by selling printers and laptop computers in large retail chains and expanding overseas.

Many investors welcomed Dell's return as CEO this year, as growth had slowed under Rollins. The Round Rock, Texas-based company had also replaced James Schneider as chief financial officer in December, when the audit was in its sixth month.

Dell spokesman Bob Pearson declined to comment on Michael Dell, but said, The company's leadership team takes responsibility overall.

The company still faces investigations by the U.S. Securities and Exchange Commission and the U.S. Attorney's office for the Southern District of New York.

The SEC will want to hear testimony from Michael Dell, said Michael Piazza, former regional trial counsel for the SEC's Los Angeles office and now in private practice at Dorsey & Whitney.

They don't want to be viewed as giving preferential treatment to corporate hotshots, Piazza said. They will want to know what all the decision-makers knew and when they knew it, and how they reacted to it.

But Piazza added: There's an understanding in the commission that the CEO cannot know everything everywhere.

The restatements affect Dell's fiscal 2003, 2004, 2005 and 2006 and the first quarter of fiscal 2007, which cover roughly the calendar period from 2002 through early 2006. Michael Dell was both chairman and CEO until 2004, when Rollins became CEO.

Dell said it was taking remedial measures including terminations, reassignments, reprimands and financial penalties. It did not name those disciplined or fired.

EVEN AFTER ENRON

Some analysts were surprised that Dell's accounting manipulations, while relatively minor from a financial standpoint, occurred after tough anti-fraud regulations went into effect following accounting scandals at Enron Corp and Worldcom Inc.

The U.S. Congress passed the so-called Sarbanes-Oxley Act in 2002, mandating stricter corporate-governance procedures and greater accountability by company executives.

Post-Sarbanes-Oxley, nobody would have thought this would have been going on, said George Stamboulidis, a former U.S. federal prosecutor who now heads the white-collar defense and corporate investigations group at Baker Hostetler.

Even if the dollar amounts are relatively minor, it's quite brazen for somebody to be doing alleged revenue recognition fraud or accounting fraud during these recent years.

Michael Dell Dell