An internal audit has cast doubts on accounting processes at Singapore Telecommunications' Australian subsidiary SingTel Optus, with the previous ownership of Cable & Wireless (C&W) taking the blame. Optus has discounted local reports of the leaked internal audit, but the most senior Optus executives are in possession of the document which identifies 'fundamental weaknesses in the management of fixed assets' and also casts doubt on its credit management. The report claims 20 per cent of all money owed to the company should be considered as doubtful debt. Optus has total receivables of about A$620 million (HK$2.9 billion), and more than 18 per cent of that is more than three months overdue. The report says A$36 million of disputed receivables require immediate management attention. More seriously, it says accounting practices for revenue in the showcase mobile division, almost half of the company's income, are based on inadequate processes. In terms of fixed assets, the report said it was a 'serious concern that the existence, condition, depreciably life, and hence value of 71 per cent of Optus' reported asset base has never been verified in the 10 years since incorporation', when C&W was a foundation shareholder. Optus chief operating officer Paul O'Sullivan said it had fixed all the problems identified in the report, but the issue highlights the ongoing problems faced by SingTel which paid A$15 billion in 2000 for Optus. It is now worth considerably less. At the time, most analysts believed SingTel had paid about 50 per cent too much, but now SingTel owns 100 per cent of Optus, there is no market capitalisation to compare it with. The best comparison is what happened to SingTel shares since the acquisition - they have fallen nearly two-thirds. Just as Telstra's shares have plummeted as a result of market cynicism over the CSL and Reach deals with PCCW in Hong Kong, SingTel's shares have been hammered because of its Optus investment. The audit is the latest in a series of bitter pills SingTel has had to swallow since acquiring Optus. In the first year after it took over, it plunged to a A$402 million annual loss. This has since improved, with the company last month announcing a modest A$22 million profit.