“Qwest’s financial statements were audited by Arthur Andersen LLP for Qwest’s fiscal years ended December 31, 1999

, 2000, and 2001 (SEC.gov).” Andersen released Independent Auditors’ Reports (SEC.gov) stating unqualified opinions for the fiscal years of 1999, 2000, and 2001, meaning they believed the financial statements fairly represented the financial position of Qwest Communications. In 2001, concerns were raised about Qwest’s accounting practices. Members of Senior Management withheld information about litigation with Cable & Wireless from Andersen (SEC.gov). The auditors, through a confirmation letter from Flag, were alerted to possible concerns with Qwest’s IRUs. Andersen requested that Qwest seek a legal opinion on whether title could transfer for all of their IRU. Qwest read the report of outside counsel to the auditors but left out important facts highlighted in the report. The report concluded that they could not come to a legal conclusion on the issue. Qwest used this non-conclusion to purport that “title would transfer at the end of the lease and thus revenue could be recognized up front (SEC.gov).” This helped to ease Andersen’s concerns which led to their signing of the 2001 10-K. In the light of Arthur Andersen’s issues with their Enron audits, Qwest decided to not reengage Andersen and instead hire KPMG as their external auditor (SEC.gov). Joe Nacchio, CEO, resigned in June 2002 stating a desire to spend more time with family and explore other opportunities (CNN.com). Nacchio came under fire after receicing a $27 million compensation package as well as stock options. Qwest had been trending downward with recent poor performance. Nacchio’s resignation came shortly after the company announced an accounting probe by the SEC. Richard Notebaert, former CEO of phone company Ameritech took over as the new CEO (CNN.com).

.p. 23 Oct. Web. 2013. 2013." U. Web. n." CNNMoney.Works Cited "Nacchio Resigns as Qwest CEO. Securities and Exchange Commission | Homepage. Cable News Network.d. Securities and Exchange Commission | Homepage. "U. N.S.S. 23 Oct..d. n.