REPORT ON WORLDCOM BY AUDITORS
Prior to May 16
2002 Anderson LLP audited the company’s 2001 financial statementsand reviewed the company’s first quarter 2002 financial statements. During this periodAnderson’s partner on WorldCom’s audits was Mel Dick. Anderson gave an unqualifiedopinion on the company’s 2001 financial statements following its audits. On February 6,2002, the Audit Committee met with Andersen to discuss Andersen's audit of theCompany's consolidated results of operations and financial position as of and for theyear ended December 31, 2001. Andersen's presentation
noted, among other things:
There were no significant or unusual transactions, or material transactions incontroversial or emerging areas for which there was a lack of authoritativeguidance or consensus.2)Andersen had assessed the Company's key accounting practices to determinewhether management had adequate controls to prevent a material error in thefinancial statements as a result of a failure to properly record data in thegeneral ledger.
It was Andersen's assessment that the Company's processes for line costaccruals and for capitalization of assets in Plant, Property & Equipment accountswere effective.
It was Andersen's assessment that the Company's process for formulating judgments and estimates for accrued line costs was effective, noting that linecosts as a percentage of revenue had remained flat at 41.9% on a YTD basis.During the meeting, Andersen advised in response to specific questions by theCommittee that Andersen had no disagreements with management and thatthere were no accounting positions taken by the Company with which Andersenwas not comfortable.