Enron Flashcards
1
Q
Mark to market accounting
A
Approved by SEC, logging estimated profits as actual ones
2
Q
Sarbanes oxley act
A
- CEO and CFO must sign off on management controls and truthfulness
- Accounting & audit different firm
- Directors have financial literacy
- Independent board of directors
3
Q
Special purpose entity
A
Used to hide losses and inflate their earnings, offshore accounts
LJM partnership Andy fastow (cfo and director)
4
Q
Arthur anderson
A
Conflict of interest
5
Q
Enron corporate governance
A
Took retainer fees but not aware of enron scandal and advice management
- Bod approved partnership of ljm (conflict of interest)
- Unfettered power in ceo
- Unethical activity within enron
