Financial Statement Fraud.Enron.AICPA

Andersen was reviewing this transaction again at the

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Unformatted text preview: In JEDI JEDI Half of the $11.4 million that bought the 3% Half involved cash collateral provided by Enron— involved meaning only 1 and ½ percent was owned by meaning outsiders © 2003, 2005 by the AICPA LJM1 SPE LJM1 Responsible for 20% of SPE restatement or Responsible $100 million $100 Should have been consolidated—an error in Should judgment by Andersen (per Andersen) judgment After Andersen’s initial review in 1999, Enron After created a subsidiary within LJM1, referred to as Swap Sub. As a result, the 3% rule for residual equity was no longer met. Andersen was reviewing this transaction again at the time problems were made public— at iinvolved complex issues concerning the nvolved valuation of various assets and liabilities. valuation © 2003, 2005 by the AICPA Enron’s Disclosures Enron’s SEC Regulation S-K requires description of SEC related-party transactions that exceed $60K and for which an executive has a material interest for “Related Party Transactions” footnote included Related in Forms 10-Q and 10-K beginning with second quarter of 1999 through 2nd quarter of 2001 quarter From 2000 annual report “…Enron entered into From transactions with limited partnerships who...
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