BusinessCompany NewsWorldCom link in AOL accounts probe

WorldCom link in AOL accounts probe

One of three mistakes admitted by media giant AOL Time Warner in its accounts allegedly involved a deal made with bankrupt telecom WorldCom, according to reports from across the pond.

Link: AOL admits accounting inacurracies

A report in today’s Washington Post claimed that one of the deals incorrectly booked as revenue involved a contract with WorldCom signed 12 months ago whereby AOL bought internet capacity from UUNet, a unit of WorldCom, to expand its online network.

In return WorldCom agreed to buy advertisements on AOL in a multi-year multimillion-dollar arrangement.

Such arrangements are considered ‘hollow’ because one set of goods or services are exchanged for another, and the only purpose is to book more revenue. The SEC is currently investigating whether such an accounting practice – called a round trip – violates government regulations.

Last week AOL, in its accounting oath made to the Securities and Exchange Commission, admitted that three deals worth $49m had been incorrectly booked as revenue.

Related Articles

BDO replaces Deloitte as Mitie auditor

Audit BDO replaces Deloitte as Mitie auditor

4w Emma Smith, Managing Editor
CVR Global appoints partner in London office

Company News CVR Global appoints partner in London office

5m Alia Shoaib, Reporter
FTSE100 failing to provide adequate ethics information

Company News FTSE100 failing to provide adequate ethics information

5m Alia Shoaib, Reporter
Brand strength leads to fee income growth for RSM

Accounting Firms Brand strength leads to fee income growth for RSM

8m Emma Smith, Managing Editor
Mazars strengthens audit team with partner appointment

Accounting Firms Mazars strengthens audit team with partner appointment

8m Emma Smith, Managing Editor
Moore Stephens recruits new private client partner

Accounting Firms Moore Stephens recruits new private client partner

8m Emma Smith, Managing Editor
Magma Group announces merger, partner promotions

Accounting Firms Magma Group announces merger, partner promotions

8m Emma Smith, Managing Editor
BDO on ‘recruitment spree’ with multiple partner appointments

Accounting Firms BDO on ‘recruitment spree’ with multiple partner appointments

8m Emma Smith, Managing Editor