WorldCom, the US long distance telephone and data services
company, confirmed yesterday that it intends to restate its
financial results for the last five quarters, after discovering
serious accounting improprieties.
The irregularities, which were discovered during a routine
internal audit, involve booking operating costs as capital
expenditures and inflating profits and cash flow statements.
Although the company did not give details, it said that the
transfers under investigation reach the amount of $3.8 billion for
the four quarters of 2001 and the first quarter of 2002.
According to WorldCom, the false financial statements were
approved by its external auditors, Arthur Andersen. The company
replaced Andersen with KPMG last month.
World Com’s accounting practices are being investigated by the
US Securities and Exchange Commission, which confirmed yesterday
improprieties of “unprecedented magnitude.”
Last night, a spokesman for the company claimed that it remains
viable and will continue its operations. He said:
“Our senior management team is shocked by
these discoveries. We are committed to operating WorldCom in
accordance with the highest ethical standards.”
