WorldCom books-blunders hit $7.6bn
WorldCom has disclosed an additional $3.8 billion in accounting errors, in addition to the $3.85 billion errors announced last month.
WorldCom last month filed for bankruptcy protection, citing $3.85 billion in improperly booked expenses in its results in 2001 and 2002.
Criminal charges have been made against the company’s former chief financial officer and chief corporate controller. The US Securities and Exchange Commission has also filed suit against WorldCom.
The pressure’s been felt across US boardrooms. Apple CEO Steve Jobs last month said the affair made him “for the first time embarrassed to call myself a businessman”.
WorldCom’s earnings for 2000/1 and the first quarter of 2002 will have to be restated. The new $3.8 billion disclosure, plus an extra $3.3 billion in improperly reported earnings before interest, taxes, depreciation and amortization (EBITDA), plus a further $501 million change in the company’s non-EBITDA pre-tax adjustments, brings its total reduction in pre-tax profit since 1999 to $7.68 billion, the company said yesterday.
The internal investigation into its accounting activities is still under way at WorldCom, and officials warned that it could uncover more errors before it is over.