Friday, June 28, 2002

THE INK WASN'T DRY ON THIS POST AND... A NEW XEROX AUDIT FOUND that the company improperly accelerated far more revenue during the past five years than the SEC estimated in an April settlement. The total amount of improperly recorded revenue from 1997 through 2001 could be more than $6 billion. [Wall Street Journal] 6:22:18 AM     Comments[]

TELECOMS ARE GIVING BACK ILL-GOTTEN GAINS When you look at the collapse of the telecom business and the actual dollar volumes of market declines and losses, you begin to see a business that has been fundamentally flawed for a long time. If stories like this have even 10% truth (and they do), we're witnessing a great purge that has been needed for far too long. 'You have no idea the evil we do' - MCI insiders break their silence. Meet the High Toll Dept. [The Register] Behind each and every market decline is a group of "home town" investors who feel as if they've been betrayed. Whether the business in question has simply dropped with the telecom market or been a party to shenanigans, telecom investors are in the same boat: Jackson, MS - Worldcom Omaha, NE - Level 3 Denver, CO - Qwest The list goes on and on. 6:10:18 AM     Comments[]

CONFLICTS became obvious when we learned accounting firms were also providing consulting advice. Similar conflicts have been obvious between stock analysts and stock brokers. Until there are clear lines separating these two, no broker or analyst will get a fair hearing - no matter what he or she is suggesting! That assumes we're talking about someone who doesn't have any other ax to grind. Here's a guy who seems to be completely uncertain about his role! Timing of a Rating Shift Is Raising Some Questions. Stock analyst Jack B. Grubman is caught in the spotlight as government investigators dig in to the accounting mess at WorldCom. By Patrick Mcgeehan. [New York Times: Technology] 5:57:35 AM     Comments[]

AUDITS WILL NOW HAPPEN EVERYWHERE outside the normally scheduled annual audit. We'll also see a call for "second opinions" in audits. The accounting attrocities are likely to be deep enough that some of the "high flyers" of the '90's restate earnings to a degree that removes them from high flyer status. It will go something like, "those weren't profits; those were accounting errors." Audit Lapse at WorldCom Puzzles Some Professionals. How Worldcom hid $3.8 billion in operating costs in order to exaggerate its earnings is as big a puzzle for accountants and auditing experts as it is for lay observers. By Jonathan D. Glaterwith Kurt Eichenwald. [New York Times: Business] 5:48:51 AM     Comments[]

© Copyright 2002 Steve Pilgrim.