Halliburton Co. yesterday agreed to pay $7.5 million to settle Securities and Exchange Commission charges that it failed to disclose a change in accounting practices that allowed the Houston oil services company to report higher earnings over six quarters in 1998 and 1999.

The SEC also cited Halliburton for unspecified "unacceptable lapses" in conduct that delayed regulators' access to information during the investigation. The company and its former controller, R. Charles Muchmore Jr., who paid $50,000 to settle related charges, did not admit or deny wrongdoing. Simultaneously, the SEC filed a lawsuit against former chief financial officer Gary V. Morris, who is not involved in the settlement.

Dick Cheney was Halliburton's chief executive from 1995 to 2000. Cheney, who was not charged with wrongdoing, provided sworn testimony and "cooperated willingly and fully" with the investigation, according to a news release issued by the SEC. Cheney's lawyer, Terrence O'Donnell, said his client's tenure at Halliburton was "proper in all respects."

The charges stem from a change in the way Halliburton accounted for revenue from construction projects from which the company received fees that were set in advance. Sometimes, however, Halliburton would seek reimbursement for extra, unplanned costs. For years, the SEC said, Halliburton booked such fees in the quarter when disputes with clients were resolved. But in the second quarter of 1998, the company changed its policy and began to offset losses with revenue from projects in which Halliburton officials thought recovery of additional fees was "probable." At that time, Halliburton was preparing to merge with Dresser Industries Inc.

Regulators said yesterday that the company's failure to tell investors about the change until 2000 was "materially misleading."

The SEC said the accounting change increased Halliburton's pretax income for 1998 by $87.9 million, or 46 percent. In the second quarter of 1998 alone, when the change was put into effect, the company was able to report a 34 percent increase in net income compared with the year before. Otherwise the increase would have been 6.7 percent, regulators said.

"Comparability of results is important for investors," said SEC enforcement chief Stephen M. Cutler.

Spencer C. Barasch, head of enforcement at the agency's Fort Worth office, said in a written statement that the Halliburton penalty "serves as yet another reminder that the Commission will not tolerate lapses by companies that serve to delay or hinder the Commission's investigative processes."

In recent years the SEC has levied a $10 million penalty against Bank of America Corp. and a $3 million penalty against Dynegy Inc. for failing to fully cooperate with regulators.

"We are pleased to bring closure to this matter," David J. Lesar, Halliburton's chairman and chief executive, said in a prepared statement. "The resolution of this issue and the pending resolution of the company's asbestos liability will help us focus on strengthening our business in energy services and engineering and construction."

Timothy R. McCormick, a lawyer for Morris, who left Halliburton in August 2002, said, "We think the commission is using a novel theory of disclosure which is not supported by the precedent. . . . We intend to defend this case vigorously."

McCormick said Halliburton had followed accounting rules and would not need to restate its earnings for the six quarters flagged by the SEC. He added that "this is not a situation where there was any investor harm."

A lawyer for Muchmore, who is now a vice president for financial controls at Halliburton, did not return calls.

Halliburton officials said they do not believe that the SEC is continuing to investigate any current employees in relation to the 1998 accounting change. But other government investigators are examining whether Halliburton unit Kellogg Brown & Root Inc. overcharged for food and fuel in Iraq, and the Justice Department is investigating its business practices in Nigeria and Iran.

Halliburton said it would adjust its previously announced results for the second quarter of 2004 and record an additional $7.5 million in expenses to cover the cost of the settlement. The adjustments broaden Halliburton's second-quarter net loss to $667 million ($1.52 per share) from $663 million ($1.51).