The saga of Nortel’s accounting woes seems to have more sequels than Rocky… except that the underdog – in our case, the shareholders – never seems to win.
We are now hearing that the the restated numbers from 2003 and 2004 and early 2005 were wrong – again. “This revenue is real – it was recognized in the wrong periods”
Help me understand this, please! Nortel overstated their earnings – they held up their financials for a year, supposedly to get their house in order. Now, we are being told “oops, we still didn’t get it right?”
Can someone tell me what the auditors are getting paid for? Exactly what did their sign off mean? Why did the shareholders pay off some other shareholders (and mainly lawyers) to the tune of $2.5B, rather than the directors and the auditors who apparently fell asleep on the job.
It seems to be too easy an excuse – like the story of the new CEO who finds 3 envelops in his desk. At Nortel, Envelop 2 seems to say “Blame the old accounting.”