Report: WorldCom To Reveal More Bogus Accounting

WorldCom

The Wall Street Journal, quoting unnamed sources, said WorldCom officials were expected to present the company's new findings to the Securities and Exchange Commission on Friday.

WorldCom spokeswoman Julie Moore would not comment.

The company indicated earlier this summer it planned a restatement.

WorldCom, which owns the nation's No. 2 long distance carrier MCI, filed for Chapter 11 bankruptcy protection July 21 after the company reported $3.8 billion in bogus accounting. That figure was later revised to $7.1 billion.

The Journal said that while the exact breakdown of the potential $2 billion addition isn't yet known, some of the revision may involve write-downs of assets. An unspecified amount also could stem from improper accounting for a partial stake WorldCom held in a foreign company, the Journal said.

WorldCom announced earlier that it may write off $50.6 billion in goodwill and other intangible assets when it does restate its finances to adjust for the accounting problems.

Five WorldCom executives are accused of being co-conspirators in the accounting scandal, the biggest in U.S. history. Federal prosecutors recently said they may level new charges and indict new defendants in the case.

"One can't help but be blown away by the magnitude of this malfeasance," said Patrick Comack, an analyst with Guzman and in Miami. "I'm not surprised they are finding more fraudulent activity but I'm certainly surprised by the size of it."

Worldcom's standing "continues to get crushed by these ongoing revelations," Comack said. "It's going to be tough for them to come back."