Qwest CFO Says Accounting Errors Not A WorldCom Situation3:04 PM EST Tue. Jul. 30, 2002
Qwest's CFO denied Tuesday accusations that the company's accounting discrepancies from 2000 and 2001 were similar to those found at WorldCom.
"Let me disabuse you of that quickly," said CFO Oren Shaffer, when he was asked during a conference call with analysts if Qwest's accounting errors were similar to WorldCom's capitalizing operating expenses.
"This has nothing at all to do with someone transferring amounts or deciding to do or not do something with them," Shaffer said. "This is purely and simply an accounting error. These things happen."
Qwest announced Sunday that accounting policies were incorrectly applied to the sales of optical capacity assets in 1999, 2000 and 2001, certain equipment transactions in 2000 and 2001 and certain telecommunications expenses in 2000 and 2001. Shaffer and CEO Richard Notebaert would not disclose which customers were involved in the equipment sales.
Notebaert said that accounting policies were incorrectly applied to about 18 percent of optical capacity transaction assets in 1999, 2000 and 2001 totaling $1.16 billion in recognized revenue.
The errors caused the carrier to book about $874 million as revenue for 2000 and 2001, while the company understated expenses by about $113 million in 2001 and overstated expenses by $15 million in 2000.
Notebaert said that all accounting errors will be corrected and disclosed to the public and that the carrier will take action against any individual who might have violated company policy.
Notebaert said it would take months before the company could fully analyze Qwest's books and restate earnings.
The carrier's second-quarter earnings call is set for August 8.