Steve Jobs, Apple's chief executive, was personally involved in the secret backdating of share options, the computer company admitted for the first time yesterday.
The iPod maker's board expressed its "full confidence" in Mr Jobs, but said he had personally recommended favourable dates for some share options grants.
The company also said that the scale of the manipulation of share options grants was much wider than previously revealed, extending to 6,428 grants for executives and other employees on 42 separate occasions.
It restated 10 years of accounts, reducing its reported profits by a total of $84m, including $4m for the most recent financial year.
Apple is the highest-profile of more than 160 companies under investigation for turbo-charging executive pay by backdating share options. By pretending they were granted on dates when the share price was low, companies were able to artificially inflate the profit made when the options were exercised.
In a small but important modification to language used in previous statements, Apple said yesterday that its internal investigation found that Mr Jobs "was aware or recommended the selection of some favourable grant dates". It reiterated that he "did not receive or financially benefit from these grants or appreciate the accounting implications".
The information which led to yesterday's additional disclosures has been passed by Apple to the US Attorney's office, which is investigating whether to bring criminal charges.
Apple said it had serious concerns about the conduct of two people, both former executives and believed to include its former finance director Fred Anderson. Mr Anderson's attorney, Jerome Roth, said the former CFO was "disappointed" to learn Apple had mishandled stock options but noted that he "did not play any day-to-day role" in the granting or accounting of company stock options. Mr Anderson also was not a member of the board when Mr Jobs received the questionable grant in 2001 and "had no knowledge of any impropriety" surrounding that grant, Mr Roth said.
Apple also admitted for the first time that internal documents showing a grant of 7.5 million share options to Mr Jobs in 2001 were faked to suggest the award gained board approval on their purported grant date. It said Mr Jobs was not aware of the irregularity.
Apple shares rose sharply on news that its independent directors - led by the former US vice-president Al Gore - had once again cleared Mr Jobs of misconduct.
"The special committee [of directors], its independent counsel and forensic accountants have performed an exhaustive investigation of Apple's stock option granting practices," Mr Gore said. "The board of directors is confident that the company has corrected the problems that led to the restatement, and it has complete confidence in Steve Jobs and the senior management team."Reuse content