Essay Example on Qwest Corporation was a communications Company

Qwest Corporation was a communications company that was rapidly growing in the late 1990s It would consistently meet its aggressive revenue targets and was a great company for its investors After announcing that they would merge with US West their stock price dropped significantly from 34 to 26 per share In order to prevent any further drops in stock price Qwest s senior management exerted extraordinary pressure on subordinate managers and employees to meet or exceed the publicly announced revenue targets In addition Qwest paid bonuses to management and employees only for periods when they achieved targeted revenue Soon after Qwest s stock price had increased to dollars higher than its original price It was later discovered that Qwest had not been following the full disclosure principles and failed to disclose the impact of nonrecurring revenues In its earnings releases and the management's discussion and analysis portion of its SEC filings Qwest improperly characterized nonrecurring revenues as service revenue often within the data and internet service revenues line item on the financial statements Qwest s nonrecurring revenue was included primarily in the wholesale services segment and to a lesser extent the retail services segment 

Qwest s CEO Joseph Nacchio did He established a company's earnings expectation at an unreasonably high number and then required employees to meet or exceed these expectations This leads to numerous problems many of which Qwest ran into It can cause high work life imbalance for employees as well as place unnecessary pressure on employees This may have been the case with Qwest it can cause employees or management to resort to fraudulent or less than acceptable techniques in order to meet the expectations that the company holds The auditing standards were created for a reason to protect investors by making sure that they have the proper information to make investment decisions Qwest did not follow these principles and led investors to make false assumptions about the company's revenue It was absolutely unethical and Qwest executives definitely deserved the charges of fraudulent activity brought against them