WorldCom reveals shocking increase in earnings errors
WorldCom yesterday (Thursday) announced that it had uncovered a further $3.3billion of over-stated earnings as a result of the continuing review of its financial statements.
The latest figures when added to the original $3.9bn overstatement, brings the total error to more than $7bn.
The fresh errors affect results for 1999, 2000, 2001 and the first quarter of 2002 and will mean the company has to restate its earnings for 2000.
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According to reports in the national press sources close to the company have indicated that the errors could relate to the incorrect release of reserves to boost profits.
In June the company had said it would need to restate earnings for 2001 and first quarter 2002, following an accounting scandal which rocked the financial markets.
The company also indicated that it may be required to write-off all goodwill and other intangible assets, with a current book value of $50.6 billion. It also said that this may not be the last of the bad news – the full impact of accounting irregularities will not be known until audits of its accounts for 2000, 2001 and 2002 are completed.
