Accounting Issues at WorldCom Speak Volumes About Disclosures


Wall Street Journal :: Every month from 1998 through much of 2000, designated staffers in WorldCom Inc.’s credit department in Tulsa, Okla., prepared lists of customers who hadn’t paid their telephone bills, many of them in bankruptcy-court proceedings. Every month they forwarded the reports to the controller’s office, recommending that, as those accounts were unlikely ever to be paid, they should be written off, some staffers allege. Suddenly, in the fall of 2000, the write-off pleas ceased falling on deaf ears. “Get this stuff off the books,” headquarters officials told the staffers, according to a former paralegal in the Tulsa office in shareholder litigation that was filed against WorldCom. The result of the frenzy that ensued: a $405 million charge in the third quarter of 2000 for uncollectible accounts, a charge that Wall Street largely brushed off as a nonrecurring event.

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