WorldCom Inc. will file on Monday a report under oath to federal regulators detailing its $3.85 billion accounting error, as internal and external investigators probe its corporate records to determine if the scandal began before 2001, sources familiar with the situation said on Sunday.

The Clinton, Mississippi-based company faces charges of fraud for accounting irregularities that allowed it to hide $1.2 billion in losses over the past five quarters -- making it one of the largest accounting scandals in U.S. history.

"We're demanding that they make a statement under oath, telling the American public exactly what went on there and what their true financial condition is," Securities and Exchange Commission Chairman Harvey Pitt said on Sunday in an interview on ABC's This Week.

"If there's even an iota of false statement in there, people will pay heavily. If the truth is in there and people get to know at least what the circumstances are, then we'll have an informed market, and there won't be insiders who can play games with the unsuspecting public," Pitt said.

New accounting scandals from WorldCom and office equipment maker Xerox Corp. added to the investor distrust created by last year's collapse of energy trader Enron Corp., and left Wall Street bracing for more bombshells. Stock markets also feared another attack on the United States around the symbolic U.S. Independence Day holiday on Thursday.

Two congressional committees subpoenaed testimony and documents from WorldCom executives, while President Bush, angered at relentless scandals in U.S. boardrooms and the economic fallout, said the Justice Department will hold accountable those responsible for any corporate wrongdoing.

Bush, who devoted his Saturday radio address to corporate governance, called for Congress to approve measures to bar corporate executives from profiting from erroneous financial statements. Bush's spokesman said the Republican president "shares the goal" of a Democrat-sponsored Senate bill that would impose tough new oversight on the U.S. accounting profession.

"WorldCom was the last straw. I think Congress will now pass something. With mid-term elections in the fall, no one wants to hear the public say, 'You haven't done anything about this,"' said Margaret Blair, a visiting professor at Georgetown University Law Center who specializes in corporate governance.

WorldCom must provide a detailed report to the SEC before the stock market opens on Monday. The report, which will be released to the public, is expected to give investors and lawmakers a clearer understanding of WorldCom's true financial standing and shed light on how many executives at the company participated in the scandal, sources said.

WorldCom declined to comment on the report.

The company last week fired Scott Sullivan, its chief financial officer since 1994, and accepted the resignation of its comptroller. The company hired William McLucas, the SEC's former chief of the enforcement division, to do an independent investigation of the accounting irregularities.

In addition to probing the accounts for the past five quarters, McLucas and WorldCom's new auditors plan to scour earlier records to determine how long expenses had been improperly recorded, sources familiar with the situation said.

In particular, internal investigators will be looking at records since WorldCom's 1998 acquisition of larger rival MCI Communications to determine if the company shifted expenses to meet its profit goals and offset shrinking revenue growth, sources said.

A federal judge last week ordered that a corporate monitor be appointed to ensure the company doesn't destroy documents or make payoffs to executives. WorldCom also must provide documents and testimony to the House Financial Services Committee and the House Energy and Commerce Committee.

Threatened with possible bankruptcy, WorldCom, the No. 2 U.S. long-distance telephone and data services company, scrambled to assembled a team of investment bankers to help it weigh the sale of assets, and hired advisers to help it negotiate more lenient credit terms with its bankers.

The company hired the investment bank Blackstone Group, a top restructuring adviser, and Weil Gotshal & Manges, a leading bankruptcy law firm, industry sources said. Goldman Sachs, meanwhile, will help the company try to sell off its Latin American assets, such as its investments in Brazil's Embratel and Mexico's Avantel, another source said.

Over the weekend, Barron's reported in its July 1 issue that a "knowledgeable telecoms-industry executive" estimated WorldCom's assets to be worth about $15 billion, if the operating units were sold quickly.

Barron's said, quoting the executive, "But time...is working against the company -- and its creditors -- because corporate clients are already defecting."

Telecommunications services provider IDT Corp. said on Friday it planned to offer $3 billion to $4 billion for WorldCom's MFS Communications unit, a provider of local telephone services to corporations that WorldCom bought in 1996 for $15.5 billion.

IDT has previously purchased Winstar Communications out of bankruptcy, and acquired parts of other telecommunications firms Teligent and ICG Comunications.