Feeds

SEC probes Lucent accounting practice

Allegations of revenue misreporting

  • alert
  • submit to reddit

Bridging the IT gap between rising business demands and ageing tools

An investigation into possibly fraudulent accounting at telecommunications equipment maker Lucent has been begun by the Securities and Exchange Commission (SEC), according to a report in today's Wall Street Journal.

The paper quotes unnamed sources "familiar with the investigation" who said the inquiry by the SEC's enforcement division will focus on whether Lucent improperly booked $679m in revenue during its last financial year, which ended on September 30.

Among Lucent business practices reportedly to be probed include its use of one-time discounts to clients and its reporting of software licensing agreements.

The SEC is also said to be looking at how Lucent recognised revenue on channel sales and how the company set revenue targets for fiscal 2000.

Lucent restated the revenues for the period under investigation in December after conducting its own investigation.

The Journal quotes Lucent spokeswoman Kathleen Fitzgerald who said the firm is co-operating with the investigation.

She said that Lucent has shared its finding which led to the revenue restatement with the commission and also given the SEC copies of an external audit conducted by PricewaterhouseCoopers and Lucent's outside counsel, Cravath, Swaine & Moore.

As previously reported, last month Lucent said it would shed 16,000 jobs and begin a seven-part restructuring plan to reduce its costs by $2 billion in an attempt to return its business to profitability. Announcement of the job cuts came when it announced a first quarter net loss of $395 million on sales of $5.84 billion. ®

Related stories

Lucent unveils IP strategy targeted at telcos
Lucent to restate sales and cut 10,000 jobs
Blunder cuts Lucent Q1 sales by $125m

The Power of One Brief: Top reasons to choose HP BladeSystem

More from The Register

next story
BBC goes offline in MASSIVE COCKUP: Stephen Fry partly muzzled
Auntie tight-lipped as major outage rolls on
iPad? More like iFAD: We reveal why Apple ran off to IBM
But never fear fanbois, you're still lapping up iPhones, Macs
Nadella: Apps must run on ALL WINDOWS – PCs, slabs and mobes
Phone egg, meet desktop chicken - your mother
HP, Microsoft prove it again: Big Business doesn't create jobs
SMEs get lip service - what they need is dinner at the Club
ITC: Seagate and LSI can infringe Realtek patents because Realtek isn't in the US
Land of the (get off scot) free, when it's a foreign owner
Samsung threatens to cut ties with supplier over child labour allegations
Vows to uphold 'zero tolerance' policy on underage workers
Dude, you're getting a Dell – with BITCOIN: IT giant slurps cryptocash
1. Buy PC with Bitcoin. 2. Mine more coins. 3. Goto step 1
There's NOTHING on TV in Europe – American video DOMINATES
Even France's mega subsidies don't stop US content onslaught
You! Pirate! Stop pirating, or we shall admonish you politely. Repeatedly, if necessary
And we shall go about telling people you smell. No, not really
prev story

Whitepapers

Designing a Defense for Mobile Applications
Learn about the various considerations for defending mobile applications - from the application architecture itself to the myriad testing technologies.
How modern custom applications can spur business growth
Learn how to create, deploy and manage custom applications without consuming or expanding the need for scarce, expensive IT resources.
Reducing security risks from open source software
Follow a few strategies and your organization can gain the full benefits of open source and the cloud without compromising the security of your applications.
Boost IT visibility and business value
How building a great service catalog relieves pressure points and demonstrates the value of IT service management.
Consolidation: the foundation for IT and business transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.