Grant Thornton Withdraws Three Quarters of Global Crossing Audit Reports

Grant Thornton has taken a dramatic step to disassociate itself from its former audit client, Global Crossing, saying it can no longer be involved with the telecommunications company’s financial statements, The reported.

According to a federal filing yesterday, Grant Thornton took the unusual move of withdrawing its Global Crossing audit reports for the last three quarters. Ernst & Young replaced Grant Thornton on April 1, after Grant Thornton complained about Global Crossing's methods, reported.

Grant Thornton raised questions about what it called "significant deficiencies" that, in the aggregate, were "material weaknesses" in Global Crossing’s accounting, reported, adding that Global Crossing did not have any immediate comment on Grant Thornton’s action.

However, the move by Grant Thornton raises new worries about Global Crossing, which had emerged from an ugly phase that culminated in its 2002 bankruptcy. This week’s news also stunned investors who bailed out in droves, sending Global Crossing’s shares into a plunge.

On Tuesday, Global Crossing announced that it would restate its 2003 financial results due to underestimated access costs, reported. The company’s internal review found that the company has between $50 million and $80 million in understated access liabilities from 2003. These costs are the company’s largest expense, adding up to $2 billion last year.

Investors would have preferred that Grant Thornton had been more specific in its earlier reports.

"In each case, GT further advised the audit committee that these internal control deficiencies did not affect GT's unqualified report on the Audited Financial Statements," the Global Crossing filing stated, reported, adding that Global Crossing says Grant Thornton did not flag any problems with access costs.

You may like these other stories...

Here's a CPA who truly walks the walk. On March 15, Frank Ryan, CPA, departed San Diego, California, with plans to be in Ocean City, Maryland, by July 2 to teach a course at the Maryland Association of CPAs’ (MACPA...
When Theodore J. Flynn first joined the Massachusetts Society of CPAs (MSCPA) in 1970, it was a different world and a different profession.  The "Big Eight" were still headquartered in Boston. Vietnam War...
Accountant Rickey Charles Goodrich had it a little too good. Many bean counters would kill to serve as financial guru to the likes of Pearl Jam. Goodrich was hired in 2005, and the following year, he became the CFO of Curtis...

Already a member? log in here.

Upcoming CPE Webinars

Sep 24
In this jam-packed presentation Excel expert David Ringstrom, CPA will give you a crash-course in creating spreadsheet-based dashboards. A dashboard condenses large amounts of data into a compact space, yet enables the end user to easily drill down into details when warranted.
Sep 30
This webcast will include discussions of important issues in SSARS No. 19 and the current status of proposed changes by the Accounting and Review Services Committee in these statements.
Oct 21
Kristen Rampe will share how to speak and write more effectively by understanding your own and your audience's communication style.
Oct 23
Amber Setter will show the value of leadership assessments as tools for individual and organizational leadership development initiatives.