NEWSWIRE - FEBRUARY 13, 2001
Topic: Financial Statements, Cash Flow, and Taxes
Source: "SEC Probes Lucent Accounting Practices,"
by Dennis K. Berman, Michael Schroeder, and Shawn Young, Wall
Street Journal, Friday, February 9, 2001, page A3.
Synopsis of Article: The article discusses the recent
investigation by the SEC of Lucent Technologies, Inc. for
possible fraudulent accounting practices. The investigation
focuses on whether or not Lucent improperly booked $679 million
in revenue during its 2000 fiscal year. It follows several
restatements of financial results by Lucent, amid many management
changes. The article provides an opportunity to discuss accounting
practices, dissemination of financial information to the market,
and credibility with investors.
Questions:
- What is the nature of the accounting practices and
changes followed by Lucent? How did they impact the financial
statements?
- Do you think Lucent broke the law?
- How did the announcements by Lucent and the SEC over
the past year impact the value of Lucent? Why did the value
react the way it did?
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