HealthSouth accounting problems continue

HealthSouth said Friday that it still has problems with internal financial controls and that its losses for 2005 were at least $260 million greater than the year before. The company, which plans to release results for the year at the end of the month, warned in a SEC filing that a new report due soon its accounting firm will contain "an adverse opinion" of its internal controls. The rehabilitation chain has been in the spotlight since 2003, when a federal investigation uncovered a $2.7 billion accounting fraud at the Birmingham, Alabama-based company. Fifteen former executives pled guilty in the case, but former CEO Richard Scrushy, who blamed the wrongdoing on a "conspiracy" among his top managers, went free after being found not guilty in a criminal trial.

- read this article from The Wall Street Journal (sub. req.)

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