Financial Statement Fraud.Enron.AICPA

The options only needed to be disclosed in a footnote

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Unformatted text preview: ron hundreds of millions of dollars in taxes by its use of stock options. Corporate executives received large quantities of stock options. When they exercised these options, the company claimed compensation expense on their tax returns. Accounting rules let them omit that same expense from the earnings statement. The options only needed to be disclosed in a footnote. Options allowed them to pay less taxes and report higher earnings while, at the same time, motivating them to manipulate earnings and stock price. earnings © 2003, 2005 by the AICPA Enron’s Corporate Strategy Enron’s Was devoid of any boundary system Enron’s core business was losing money—shifted its focus from Enron’s bricks-and-mortar energy business to trading of derivatives (most derivatives profits were more imagined than real with many employees lying and misstating systematically their profits and losses in order to make their trading businesses appear less volatile than they were) than During 2000, Enron’s derivatives-related assets increased from $2.2 Dur...
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This document was uploaded on 03/29/2014.

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