NEW YORK (CNN/Money) - Qwest Communications International Inc., which admitted to improperly recording $1.1 billion in revenue, is in talks with the Securities and Exchange Commission to settle an investigation into the company's accounting practices, according to a report Thursday.

Sources close to the situation said the discussions are in the early stages, the Wall Street Journal reported.

While a Qwest spokesman would not confirm or deny the talks to CNNfn, he said, "We are in the process of examining a number of issues with respect to Qwest's previously issued financial statements. We have met with representatives of the SEC's Division of Enforcement and the Office of the Chief Accountant, and we are co-operating with the SEC's ongoing investigation and pursuing an appropriate resolution as expeditiously as practical."

In its announcement of the accounting errors Sunday, Qwest officials said the problems stemmed from sales of fiber-optic capacity to other companies.

A settlement could help Qwest move forward, putting the accounting scandal behind it so it can start solving its financial problems, the report said.

Qwest Chairman and CEO Richard Notebaert is open to settling with the SEC if it allows the company to start fresh, the Journal reported.

The paper also said the company would consider settling fraud charges if it didn't have to admit guilt, according to people close to the situation.

The Justice Department also is investigating possible criminal activity that may have occurred within the company.

The SEC declined to comment on the Qwest situation, the Journal said, adding that in the past the agency has preferred to settle such cases rather than incur the costs of going to trial.