Accounting scandal exposed at Qwest
Qwest Communications International, a leading provider of local telephone services in the US, has admitted to incorrectly accounting for over $1.1 billion of transactions from 1999 to 2001 in the latest exposure of accounting irregularities at a telecommunications company.
In a statement, Denver, Colorado-based Qwest revealed it may have improperly accounted for services bought from other telco carriers and for equipment it traded.
Qwest's business practices were already under investigation by the SEC and the Department of Justice. Qwest had previously been audited by Arthur Andersen.
In an interview with analysts, Richard Notebaert, Qwest's Chief Executive, said he expected the company to restate its financial results for 1999 to 2001, following a thorough review of accounting practices. Qwest grew into one of the US’s biggest telecommunications companies following a $50 billion acquisition of US West in 1999.
News of its financial shenanigans marks the latest in a series of scandals that have stigmatised telecommunications companies in the US.
During the last six weeks alone, Adelphia Communications, Global Crossing and WorldCom have all come under fire from furious investors and regulatory authorities for misstated or deliberately-falsified earnings.
Notebaert claimed Qwest would not be forced into filing for bankruptcy protection, as Adelphia, Global Crossing and WorldCom had been forced to do. “We will not be the next shoe to drop. We believe we're doing the right thing by discussing this issue in a very transparent way.”