Under former chief executive L. Dennis Kozlowski, Tyco International Ltd. "engaged in a pattern of aggressive accounting" and used "pressure" and "inducements" to get managers to increase earnings through accounting decisions, the company said in a report yesterday.

The report, which stemmed from an investigation the company commissioned by outside lawyer David Boies, concluded that there "was no significant or systemic fraud" and that the accounting errors were not "material to the overall financial statements." Some of the aggressive accounting, while pushing the envelope, complied with accounting rules, added the report, which was filed with the Securities and Exchange Commission.

Tyco said it was making $382.2 million of "adjustments" to its fiscal 2002 accounting while correcting $36.1 million of accounting errors from the prior three years. The conglomerate, which makes home security systems and medical devices, had more than $35 billion in revenue in the fiscal year ended Sept. 30.

Kozlowski is awaiting trial for allegedly stealing hundreds of millions of dollars from Tyco. Prosecutors allege that Kozlowski used company money to buy luxury homes and decorate them with art and other furnishings, such as a $6,000 shower curtain. His attorney did not return a call to his office late yesterday.

The report described a culture in which internal memos and presentations discussed the potential benefits of "financial engineering" and managers were urged to "create stories" to support accounting decisions.

In the margin of the "create stories" document, someone had written, "Be Careful!! -- I wouldn't want this to get out" and "I would strongly recommend Never to put this in writing!!"

For example, a 1998 presentation on a pending merger with U.S. Surgical Corp. indicated that Tyco could recognize $72 million from "Financial Engineering" in 1999 and $52 million in each of the following two years, the report said.

The report also calls into question Tyco's cooperation with an inquiry into its accounting that the SEC opened in 1999 and closed the following year.

"A large quantity of documents collected by Tyco and its counsel in connection with the SEC's document request had not been produced to the SEC at the time the SEC closed its inquiry in July 2000," the report said. Tyco recently "advised the SEC of the existence of certain documents responsive to its original request in 1999 that had not been produced." The documents were turned over to regulators on Dec. 20, the report said.

The law firm Wilmer, Cutler & Pickering was the "counsel" the report referred to as having helped collect the documents during the SEC inquiry, a source familiar with the matter said.

William R. McLucas, co-chairman of the law firm's securities practice and a former SEC enforcement director, declined to comment.

Under Kozlowski, Tyco grew through hundreds of acquisitions. Tyco management appeared to influence some of those companies into depressing their financial results before the mergers to make Tyco's results look better after the mergers, the report said.

Before Tyco's 1998 acquisition of Sigma Circuits Inc., for instance, Tyco pressured Sigma to delay shipments of goods until after the deal was completed so that Tyco could claim the revenue, the inquiry found. Before Tyco's 1999 acquisition of Raychem, Raychem management issued directions to hold back shipments and pay all bills whether they were due or not, the report said.

And in several cases, it found that money put in reserve in connection with mergers was later taken out of reserve and counted as income.

Even when Tyco corrected problems its auditors had spotted, it did a sloppy job, the report suggested. The corrections were made through offsetting accounting entries at the corporate level, leaving the financial results of individual business segments in error, the report said.

The report also faulted Tyco's internal controls.

One area of alleged abuse involved relocation loans. Delving deeper into the loan program, the report said $3.2 million of the $3.8 million of loans outstanding as of June 30 appear not to have met the program's guidelines.

In reviewing $12 million in other loans, Boies's team found loans totaling $182,000 for key employees to purchase Tyco stock were authorized by Kozlowski's personal assistant, the report said. The company planned to forgive $3.7 million of those loans, but it wasn't clear how the forgiveness was approved, the report said.

Kozlowski had the company rent hotel accommodations for him in London at a cost of about $110,000 for 13 days, the report said.

The investigators also found millions of dollars of unauthorized, undocumented and "overgenerous" bonuses. One unit vice president approved a bonus for the unit's president.

The Boies investigation, conducted with the help of accountants at three firms, including Ernst & Young and KPMG, consumed about 15,000 lawyer hours and 50,000 accountant hours, the report said.

Former Tyco chief executive L. Dennis Kozlowski is awaiting trial for allegedly using company funds to enrich himself.