One is the use of special purpose entities (SPEs). Although SPEs often serve legitimate economic purposes and are still in use today‚ Enron used several of them to hide debt and to overstate equity and earnings. Accounting standards required that third parties own at least 3 percent of the assets in SPEs. This rule was violated. Enron also represented that the SPEs helped it to hedge downside risk. This turned out not to be the case‚ because the SPEs used Enron’s stock and financial guarantees to
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commitment with Barclay Bank because outside investors were not found. Because of this‚ they restated activities of JEDI and Chewco SPEs so they could be retroactively consolidated into Enron’s accounts. The SPEs helped to hide the inaccurate accounting records. Enron’s legal department wrote contracts that helped provide a cover for misuse of funds regarding the SPEs. Future revenue was reported as current revenue. Stocks were paid with promissory notes instead of cash. They also engaged in off-the-books
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unregulated. As Enron’s business model became more complex‚ it began to push the limits of accounting. The two main financial reporting issues that Enron faced consisted of mark-to-market accounting‚ and financial reporting for special-purpose entities (SPEs) that Enron used to implement its light asset strategy and to hedge investment gains. By 2000‚ Enron has hundreds of these
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monitor the auditor’s independence and effectiveness. True and fair view With regard to issues arising from SPE‚ Raptors were not hedges in the economic sense of transferring risk to a third party‚ but rather a means of absorbing losses with a reserve of Enron shares contributed by the hedging entity. However‚ Anderson approved Enron not to consolidate Raptor because Raptor is defined as SPE that means Andersen had seriously breached the true and fair criterion. Enron avoid to put pressures on balance
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SPE 167543 Wellbore Stability Management In Depleted And Low Pressure Reservoirs Fekete Paul O.‚ Dosunmu Adewale‚ Anthony Kuerunwa‚ Ekeinde Evelyn B.‚ Anyanwu Chimaroke‚ and Odagme Baridor S.‚ Dept. of Petroleum and Gas Engineering‚ University of Port Harcourt‚ Nigeria Copyright 2013‚ Society of Petroleum Engineers This paper was prepared for presentation at the Nigeria Annual International Conference and Exhibition held in Lagos‚ Nigeria‚ 30 July–1 August 2013. This paper was selected for presentation
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Enron Corporation began as a small natural gas distributor and‚ over the course of 15 years‚ grew to become the seventh largest company in the United States. Soon after the federal deregulation of natural gas pipelines in 1985‚ Enron was born by the merging of Houston Natural Gas and InterNorth‚ a Nebraska pipeline company. Initially‚ Enron was merely involved in the distribution of gas‚ but it later became a market maker in facilitating the buying and selling of futures of natural gas‚ electricity
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obscure its true financial position? This paper attempts to answer these questions by examining the two financial reporting issues that contributed to Enron’s most significant accounting restatements: the consolidation of special purpose entities (SPEs) and the issuance of stock for notes receivable. 1 The authors gratefully acknowledge the financial support and resources provided by Villanova University’s College of Commerce and Finance. The authors also thank Noah Barsky for comments and
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Auditing a Publicly Traded Company As a Staff I assigned to the audit of a publicly traded company‚ your senior has asked you to evaluate both share-based payment reporting and special purpose entities (SPE) reporting for the company. Research share-based payment reporting and SPE reporting individually. Write a 700- to 1‚050-word executive memo as a team that includes a description of what you will look for to see if the client is consistent with the generally accepted accounting
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eliminates an alternative accounting method; consequently‚ similar economic transactions will be accounted for similarly” (para. 4). Special purpose entities or SPEs are defined by Crawford and Fredericks (2003) as “A separate legal structure created by a firm to provide liquidity and/or obtain favorable external funding” (para. 4). SPEs are often used to reduce larger risk by corporations. These structures assist corporations to obtain financing as well as assets. It appears that with this rule
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RUNNING HEAD: INTELLECTUAL DISABILITIES Intelligence and Adaptive Behavior Melissa Furash Grand Canyon University: SPE 351 June 17‚ 2012 Intelligence is a difficult term to define. It seems‚ at first‚ to be so clear that we all know what is intelligence. Once we start trying to define it the term seems amorphous‚ changing with each passing thought. British psychologist Charles Spearman concluded that intelligence is general cognitive ability that could be measured and numerically
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