WorldCom uncovers more false accounting

New reports bring total errors to $7.1 billion

? Bankrupt telecommunications firm WorldCom Inc. said Thursday it had uncovered an additional $3.3 billion in bogus accounting, bringing the total to some $7.1 billion.

WorldCom also warned it may find more accounting problems as it continues an internal investigation.

The company previously reported finding $3.8 billion in accounting irregularities for 2001 and the first half of 2002. The latest discovery was made as the company reviewed its books for 1999 and 2000, with most of it tallied in 2000, the Clinton, Miss.-based company said.

As a result, WorldCom said it would restate its financial statements for all of 2000, 2001 and the first quarter of 2002 and likely write off $50.6 billion in goodwill and other intangible assets to reflect the reduced value of the acquisitions it has made.

WorldCom, the once high-flying long-distance and Internet company, filed for Chapter 11 bankruptcy protection July 21 with the company listing $107 billion in total assets and $41 billion in debts. It was the biggest bankruptcy filing in U.S. history.

Thursday’s additional restatement comes amid a string of accounting scandals that have tarnished some of the nation’s largest firms, felling once companies like Enron and Global Crossing. The fallout from the revelations of corporate malfeasance has severely shaken investor confidence, pummeling stocks and pension funds.

WorldCom spokesman Brad Burns said the figures announced Thursday had been reported to the Securities and Exchange Commission and that the findings wouldn’t affect the company’s ability to keep operating.

“The company identified the financial issues to the investigative authorities and we are working hard to get the company back on solid financial footing,” Burns said.

Burns said investors and creditors should be aware that additional amounts of improperly reported pretax income and earnings may be discovered.