- DENVER (Reuters) - Qwest
Communications International Inc., which is the subject of an accounting
investigation by the U.S. Securities and Exchange Commission, said on Sunday
it used improper accounting methods in 1999 through 2001 and will restate
its financial results.
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- Qwest, the dominant local telephone company in 14 states
from Minnesota to Washington, also withdrew its financial forecasts for
2002, citing ongoing weakness in the telecommunications sector, stiff competition
and softness in regional economy. It said all areas of its business have
been hurt.
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- The Denver-based company, which also faces a criminal
probe by the U.S. Justice Department, said it improperly accounted for
about $1.16 billion in sales of optical capacity on its network, as well
as sales of communications equipment. The company said it is reviewing
the accounting practices and may be required to restate all optical capacity
sales.
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- The expected restatement of the company's financial statements
will also include adjustments for three transactions relating to the sale
of communications equipment.
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- Qwest said its new auditor, KPMG, will not be able to
finalize its review of the second quarter financial report. Qwest is one
of several telecommunications companies, including bankrupt carriers Global
Crossing Ltd. and WorldCom Inc., to come under scrutiny by federal regulators.
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