Accounting & Tax

SEC Probing Telecoms’ Accounting

The Securities and Exchange Commission is seeking to determine whether some of the largest telephone and cable companies are keeping former custome...
Stephen TaubJuly 6, 2004

The Securities and Exchange Commission is investigating how some of the largest telephone and cable companies count their subscribers, according to published reports.

The commission has reportedly sent a letter to about 20 companies, including giants AT&T Corp. and Comcast Corp., to determine whether they are keeping former customers on their books. Other companies that have acknowledged receiving the letter, according to several published reports, include AT&T Wireless Services Inc., Cox Communications, Cingular Wireless, Verizon Communications, and BellSouth Corp.

In fact, on Thursday Verizon admitted in an SEC filing that the number of its long-distance lines has been overstated by about 1.5 million lines, or more than 9 percent above the correct amount, which is roughly 16 million.

Drive Business Strategy and Growth

Drive Business Strategy and Growth

Learn how NetSuite Financial Management allows you to quickly and easily model what-if scenarios and generate reports.

Verizon said it found the error “in connection with an ongoing internal review of its long distance customer base.” The company added that the overstatement had no effect on revenue, financial results, balance sheets, or statements of cash flows.

This is not a new issue, Reuters pointed out; in prior years, Adelphia and Charter Communications had to restate subscriber numbers after the SEC questioned their accounting practices.

The SEC reportedly said that it expects responses to its letter before July 19.

4 Powerful Communication Strategies for Your Next Board Meeting