Go to Jeff Salisbury LWGate Home Page.From: Spencer48@aol.com
Subject: [CANSLIM] Re. Recent Accounting Scandals
Date: Mon, 1 Jul 2002 18:45:17 EDT
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Canslimmers:
This information is from the 6/20/02 Wall St. Journal (I subscribe to
WSJ-online, and it is a good research-articles journal for stocks, the
economy and business in general. However, I like IBD's coverage of
statisitics more.) We've been remarking on recent accounting frauds
perpetrated by once respected Accouting Firms and Corporate high-muckety
mucks (with the emphasis on "muckety-mucks"), so here they are (Caution:
Don't inhale too deeply). jans
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"Corporate Accountability
A look at companies whose business practices have been questioned, the issues
involved and the auditor at the time.
COMPANY ISSUE PERCENT CHANGE IN SHARE PRICE SINCE 1/14/00* AUDITOR
Adelphia Whether it failed to properly disclose $3.1 billion in loans and
guarantees to its founder's family. -99.75% Deloitte & Touche
CMS Energy Disclosed it overstated revenue in 2000 and 2001 by including
artificial 'round trip' energy trades. -64.80 Andersen
Computer Associates Whether it artificially inflated revenue and improperly
rewarded top executives. -75.76 Ernst & Young
Dynegy Whether its 'Project Alpha' transactions served primarily to cut
taxes and artificially increase cash flow. -65.76 Andersen
Enron Admitted it improperly inflated earnings and hid debt through business
partnerships. -99.80 Andersen
Global Crossing Whether it sold its telecom capacity in a way that
artificially boosted its 2001 cash revenue. -99.87 Andersen
Halliburton Whether it improperly recorded revenue from cost overruns on big
construction jobs. -58.66 Andersen
ImClone Systems Former CEO Samuel Waksal charged with insider trading.
- -81.83 KPMG
Kmart Says the SEC is investigating its accounting and other practices. The
company investigated whether it improperly accounted for vendor allowances,
and since changed its practice. -89.37 PricewaterhouseCoopers
Lucent Technologies Adjusted fiscal 2000 revenues by $679 million, spurring
SEC investigation. Agency also investigating whether vendor-financing played
an improper role in its sales. -96.69 PricewaterhouseCoopers
MicroStrategy Settled without admitting wrongdoing an SEC suit accusing it
of backdating sales contracts to meet quarterly financial estimates, among
other improper revenue-recognition practices. -99.56 PricewaterhouseCoopers
Network Associates Whether it hid expenses or overstated revenue from 1998
to 2000. -31.18 PricewaterhouseCoopers
PNC Financial Services Restated its 2001 results by $155 million after
regulators raised concerns about how PNC accounted for a transfer of loans.
+11.83 Ernst & Young
Qwest Whether it inflated revenue for 2000 and 2001 through capacity swaps
and equipment sales. -93.45 Andersen
Reliant Resources Admitted it inflated revenue by counting artificial 'round
trip' energy trades. N.A. Deloitte & Touche
Rite Aid Acknowledged overstating net income by $1.6 billion. Former
executives are charged with inflating earnings to reap rewards tied to
financial performance. -70.40 KPMG
Tyco International Whether it improperly created 'cookie jar' reserves that
were supposed to cover merger costs but instead were drawn on to boost
profits; and whether it improperly 'spring-loaded' earnings from acquisitions
by accelerating their pre-merger outlays. -60.91 PricewaterhouseCoopers
WorldCom Admitted to improperly booking $3.8 billion in expenses as capital
expenditures. SEC is also examining whether it used questionable methods to
book sales, classify assets and account for debts it couldn't collect.
- -98.22 Andersen
Xerox Fined $10 million without admitting or denying wrongdoing for
inflating revenue and profits from 1997 to 2000 by including future payments
on existing contracts. -70.42 KPMG
*Jan. 14, 2000 was the date the Dow Jones Industrial Average hit its all-time
high; all percent changes compare share prices on that date to closing share
prices on June 28, 2002."
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