PracticeAccounting FirmsCollapsed telco faces SEC accounts probe

Collapsed telco faces SEC accounts probe

Bankrupt US carrier, Metromedia Fiber Network has admitted that the US Securities and Exchange Commission has begun a formal investigation into its past accounting practices.

The investigation is the latest in a long line of SEC and other regulatory investigations into the accounting of some of America’s largest telecom operators. Metromedia resells its network capacity to a host of other service providers including long-distance, wireless and ethernet networking companies.

According to the carrier, which has fibre optic networks across the US and Europe, the investigation is looking into what led the company to recently restate its 2001 operating results. The firm said it is co-operating fully with the investigation.

In April, Metromedia announced its intention to restate its financial results for 2001 at the same time as revealing it had defaulted on nearly $675m of debt.

The restatement involved revenue/sales credit recognition, timing of expense issues and non-cash lease accounting and purchase accounting issues.

At the time that Metromedia announced its plans to restate figures, the company’s auditor, KPMG, said it was unable to review the carrier’s financial data because of the way the company prepared its financial information.

News of the investigation comes less than a month after Metromedia’s move to file for Chapter 11 protection. At that time Metromedia said it would dispose of non-productive properties and cut jobs.

Analysts expect that to lead the operator into seeking a buyer for its European operations, fibre-optic metropolitan networks in 11 European cities. The firm also had plans for similar networks in four more European cities.

Related Articles

BDO’s global revenues pass $8bn

Accounting Firms BDO’s global revenues pass $8bn

4d Alia Shoaib, Reporter
Top 40 International Networks, Associations and Alliances: Finding growth amid uncertainty

Accounting Firms Top 40 International Networks, Associations and Alliances: Finding growth amid uncertainty

6d Philip Smith, Reporter
Top 40 International Networks, Associations and Alliances 2017: Big Four tussle for top spot

Accounting Firms Top 40 International Networks, Associations and Alliances 2017: Big Four tussle for top spot

1w Emma Smith, Managing Editor
BDO reports revenue growth of 5.7%

Accounting Firms BDO reports revenue growth of 5.7%

2w Alia Shoaib, Reporter
Taylorcocks announces merger with Surrey firm

Accounting Firms Taylorcocks announces merger with Surrey firm

2w Emma Smith, Managing Editor
Kingston Smith reports 7% gender pay gap

Accounting Firms Kingston Smith reports 7% gender pay gap

2w Emma Smith, Managing Editor
RSM announces two partner promotions

Accounting Firms RSM announces two partner promotions

3w Emma Smith, Managing Editor
Backsourcing: The latest accountancy trend?

Accounting Firms Backsourcing: The latest accountancy trend?

1m Pillsbury Winthrop Shaw Pittman