Financial Accounting Blog

Friday, June 11, 2004

Qwest fails after overstatment of revenue was revealed reports that after the collapse of telecommunications company Qwest was overstating its revenues. By overstating revenues, Qwest appeared to be profitable, though it was not.
All four defendants and four other Qwest executives have been sued by the Securities and Exchange Commission, which says they inflated revenues by about $144 million in 2000 and 2001 to meet promises of double-digit revenue growth. That lawsuit has been put on hold pending the criminal trial. The company also faces several shareholder lawsuits...
The case is the first to come out of investigations that prompted Qwest chief executive Joseph Nacchio to quit in 2002 and ultimately led the Denver-based company to erase $2.5 billion in revenue.