Guest DrTom Report post Posted August 9, 2002 I think they just need to stop counting... WorldCom misses $3.3 billion more By Reuters Special to ZDNet News August 8, 2002, 6:15 PM PT Bankrupt telecommunications giant WorldCom said Thursday an internal audit of its books back to 1999 has revealed another $3.3 billion in accounting errors, bringing the total disclosed in the scandal to more than $7 billion. The Clinton, Miss.-based company also said it may write off $50.6 billion of goodwill and other assets and it would reevaluate the value of its property, plant and equipment. WorldCom said it discovered $3.3 billion in earnings that were improperly recorded on its books from 1999 to the first quarter of 2002. That is on top of the $3.85 billion in expenses the company previously said it had improperly booked as long-term investments. "WorldCom is continuing its internal financial investigation," the company said in a statement, adding a warning that additional amounts of improperly reported earnings and income could be discovered. The earlier accounting errors brought fraud charges against WorldCom by the U.S. Securities and Exchange Commission in June and pushed the company into bankruptcy last month--the largest in U.S. history listing $41 billion in debt. The discovery of further accounting problems is not a total surprise, as WorldCom has said it was probing its books as far back as 1999. The company is also under investigation by the U.S. Justice Department and Congress. "As we get into this investigation, we have to ask where the professionals were, the accountants and the lawyers," Deputy U.S. Attorney General Larry Thompson said in Los Angeles before the WorldCom announcement. "We are going to look at their roles in these transactions." WorldCom fired its chief financial officer, Scott Sullivan, in June for his role in the accounting debacle. He and former Controller David Myers were arrested last week on charges of securities fraud and filing false statements with the SEC. The $3.3 billion in earnings were before interest, taxes, depreciation and amortization and covers the period of 1999 through the first quarter 2002, the company said Thursday, adding that it would restate its earnings for 2000. "The amounts disclosed today have previously been disclosed to the SEC and other investigative authorities," the company said. The $3.85 billion of improperly booked expenses that were previously disclosed covered only 2001 and the first quarter of 2002. The company said it plans to restate "as soon as practicable" its 2000 financial statements on top of its previously announced plans to revise the statements for 2001 and the first quarter of 2002. WorldCom hired auditor KPMG to scour the company's books back to 1999 for accounting problems. The company also retained William McLucas, the former head of the SEC enforcement division, to do an independent investigation of the accounting irregularities. WorldCom's former chief executive, Bernie Ebbers, resigned in April under pressure from the company's massive debt load, a cratering stock price and questions about $408 million in loans he received from the struggling company. Accounting firm Andersen handled the audit of WorldCom's books for 2001, the same firm that also reviewed the books of other giant corporate disasters like Enron and Global Crossing. The auditor said WorldCom withheld key information and did not consult with them about treating the expenses. WorldCom, which says it carries half of the world's Internet traffic and is the No. 2 U.S. long-distance telephone carrier, was charged with fraud by the SEC for allegedly hiding $1.22 billion in losses over 15 months starting in 2001. Story Copyright © 2002 Reuters Limited. All rights reserved. Share this post Link to post Share on other sites
Guest starvenger Report post Posted August 9, 2002 You know, if you've cooked your books to the tune of $3.7B, what's another $3.3B, really? Share this post Link to post Share on other sites
Guest Vern Gagne Report post Posted August 9, 2002 Why don't you hear anything about Global Crossing, which might be worse than any other corrupt company. Share this post Link to post Share on other sites
Guest DrTom Report post Posted August 9, 2002 Why don't you hear anything about Global Crossing, which might be worse than any other corrupt company. Global Crossing was certainly bad -- especially for Terry McAuliffe -- but Worldcom had the largest debt in the history of bankruptcy filings. And that $41 billion figure was before this latest round of "accounting errors" (read: fraud) was discovered. Share this post Link to post Share on other sites
Guest kkktookmybabyaway Report post Posted August 10, 2002 Hmm, if I max out all my credit cards, could I get away with it being an "accounting error" since I made a mistake about the amount of debt I was racking up? Share this post Link to post Share on other sites
Guest Vern Gagne Report post Posted August 10, 2002 Why don't you hear anything about Global Crossing, which might be worse than any other corrupt company. Global Crossing was certainly bad -- especially for Terry McAuliffe -- but Worldcom had the largest debt in the history of bankruptcy filings. And that $41 billion figure was before this latest round of "accounting errors" (read: fraud) was discovered. Thanks for mentioning Terry McAuliffe. Who else thinks if it was the Chairman of the Republican Party in the same boat as McAuliffe, un-biased networks like CNN, and that wonderful and fair Peter Jennings wouldn't be covering it alot more? Share this post Link to post Share on other sites
