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Qwest Communications International, Inc. Scandal!
Transcript of Qwest Communications International, Inc. Scandal!
What GAAP Rule was broken.
- The Matching Principle requires a company to match expenses with related revenues in order to report a company's profitability during a specified time interval.
- They helped Enron cover up there losses and made it seem like they were making more than they actually were.
- Qwest refused NSA surveillance requests which brought up suspicions.
- Qwest's lack of internal controls and not correct books and records resulted in many other accounting errors during the same period, including a
$56 million overstatement
in operator services revenue.
- In the end Qwest was fined
Who is this Joseph Nacchio.
-Born June 22, 1949 in Brooklyn, New York Joseph was the chairman of the board and chief executive officer of Qwest from 1997-2002.
What was his charges.
- Joseph Nacchio was sentenced to six years in federal prison and ordered to pay $19 million in fines and forfeit $52 million from the illegal stock trades and just finished his sentence on September 20, 2013.
"Spirit of Service"
The Effect it had on Customers
- Qwest was faced by the illegal practice of “slamming”, or switching local telephone customers to long distance service without their permission.
-Customers were not happy and many switched there local telephone company.
- Customers Opinion: “Qwest’s Slogan is Ridiculous, Considering that Their Customer Service is Ridiculously Horrible…I do still have Qwest DSL service, but only because I don’t want to switch to cable internet and I don’t think I have any other options. If I knew of any other DSL provider in this area I would switch in a heartbeat.” 2007