Enron: Questionable Accounting Leads to Collapse The Enron Corporation was established by integrating two major gas pipelines in 1985. The Company provided products and services related to natural gas‚ electricity‚ and communications and it was one of the world’s leading organizations at these sectors with claimed revenues of nearly $101 billion in 2000. Throughout the 1990s‚ Chair Ken Lay‚ chief executive officer Jeffrey Skilling and chief financial official officer Andrew Fastow transformed
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and the board of directors of Enron. d. The Regulatory agencies and accounting groups: The SEC and the FASB provided little in the way of formal guidance for companies to follow in accounting and reporting for SPEs. The gaping loophole in accounting practice allowed companies to create SPEs which had controversial exception. This exception worked in favor of Enron. The lack of PCAOB to oversee the rule
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The Enron Collapse By: Jeff Porter Kevin Clark Jared Sabelhaus February 18‚ 2005 Introduction Companies have mission statements that often read like inspirational leaflets. Enron’s mission was at first to be the world’s greatest energy company then later revised in early 2001 to be the “world’s greatest company”. In the late 1990’s‚ Enron seemed to have accomplished their mission accumulating vast amounts of assets‚ had the intellectually elite at the helm‚ a political climate in their
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1. By Chris Gallant on February 26‚ 2009 http://www.investopedia.com/ask/answers/07/securitization.asp Definition of Securitization What is securitization? Securitization is the process of taking an illiquid asset‚ or group of assets‚ and through financial engineering‚ transforming them into a security. A typical example of securitization is a mortgage-backed security (MBS)‚ which is a type of asset-backed security that is secured by a collection of mortgages. The process works
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How can you see news that’s specific to the bond markets 4‚ top BON<GO> On DDIS<GO>‚ you can narrow the GROUP to see debt from the parent company and all subsidiaries excluding spvs and spes True On BTMM<GO>‚ rates are not available for Kazakhstan? False On BYFC projections are avaible up to ___quarters 6 which functions will show you how to see relative value among credit default swap spreads? GCDS<GO> Which functions will allow you to graph the USD US
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The Enron scandal Tobias Pavel Mylene Encontro 910422 850224 Chalmers University of Technology Finacial Risk‚ MVE220 Examiner: Holger Rootzén 2012-12-02 Göteborg This report has been written and analyzed by both group members jointly. Abstract From the 1990 ’s until the fall of 2001‚ Enron was famous throughout the business world and was known as an innovator‚ technology powerhouse‚ and a corporation with no fear. The sudden fall of Enron in the end of 2001 shattered not just the business
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Enron was originally a pipeline company in Houston‚ Texas in 1985. Enron became a company that was able to profit by providing deliveries of gas to utility companies and businesses. As the deregulation of electric power rose‚ Enron diversified the business and entered into an energy broker‚ which traded electricity and other types of commodities. Enron employed several highly qualified PHDs in mathematics‚ physics‚ and economics. Enron continued to enter into contracts with customers and utilized
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venture that looked promising as a new profit center. Their acquisitions were growing exponentially. Enron had also been forming off balance sheet entities to move debt off of the balance sheet and transfer risk for their other business ventures. These SPEs were also established to keep Enron’s credit rating high‚ which was very important in their fields of business. Because the executives believed Enron’s long-term stock values would remain high‚ they looked for ways to use the company’s stock to hedge
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Financial Accounting Theory and Analysis 10e Chapter 1 - The Development of Accounting Theory What is Theory? Webster defines theory as “Systematically organized knowledge‚ applicable in a relatively wide variety of circumstances; a system of assumptions‚ accepted principles and rules of procedure to analyze‚ predict or otherwise explain the nature of behavior of a specified set of phenomena.” Why is the development of a general theory of accounting important? The development of a general
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with respect to the fiber. LJM2 sold a portion of the fiber to industry participants for $40 million‚ which resulted in Enron recognizing agency fee revenue of $20.3 million. LJM2 sold the remaining dark fiber for $113 million in December 2000 to an SPE that was formed to acquire the fiber. In December 2000‚ LJM2 used a portion of the proceeds to pay in full the note and accrued interest owed to
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