Adelphia Can't Promise SEC AccuracyAug 14, 2002 | AP
Five months after it first disclosed major problems with its books, Adelphia Communications Corp. is still unable to guarantee the accuracy of its financial statements, the company informed the government Wednesday.
The nation's sixth-biggest cable television provider made the disclosure hours before a deadline by which executives at large companies were required to swear to the accuracy of financial reports.
The leaders of approximately 700 corporations were required to file the sworn statements with the Securities and Exchange Commission by 5:30 p.m.
Instead, Adelphia's chairman and interim chief executive officer, Erland Kailbourne, and its chief financial officer, Christopher Dunstan, submitted a statement saying the company was "not able to state and attest" that its SEC filings contained no "untrue statement of a material fact."
"We will not have audited results for recent periods until later this year, when our new auditor, PricewaterhouseCoopers, completes its review," Kailbourne said in a written announcement.
The new rule is intended to hold executives accountable for the accuracy of their company's public filings. Those who falsely certify company reports could be prosecuted.
The rule was put in place partly because of allegations that Adelphia filed financial statements that misstated the company's debt by billions of dollars. Several companies responded to the deadline Wednesday by restating financial reports to reflect lower profits.
Adelphia has been reviewing its books following the ouster and arrest of its founder, John Rigas. The company said it does not expect its audit to be completed until later this year.
The company fired its previous auditor, Deloitte & Touche, in June. It still hasn't filed its 2001 annual financial report, which was due in April. The company filed for chapter 11 bankruptcy in June.