Restating financial results is becoming a common occurrence in the wireless industry. Nortel Networks, still suffering from an accounting scandal, said it will restate results again, this time for 2003, 2004 and the first nine months of 2005. Leap Wireless plans to restate results for the final five months of 2004 after it emerged from Ch. 11 bankruptcy in August, and the first nine months of 2005. The company said it found the mistakes while preparing its 2005 taxes. However, it expects to announce improved results. Shenandoah Telecommunications recently indicated that it would correct its results for 2003, 2004 and the first three quarters of 2005 by about $2.1 million. Meanwhile, US Cellular has been working since November to restate financial results dating back to 2000.
Since 2004, we've seen a rash of honesty among a host of industries, with companies simply admitting they were wrong about past financial results. Experts say the biggest reason is the new corporate governance and accounting rules in the wake of the corporate reform legislation that was enacted about two-and-a-half years ago. Also, accounting firms have grown far more cautious because of the Enron scandal in 2002. We'll likely see more in wireless, much to the ire of investors.