I company allegations founding rigas family collected

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I Company Allegations Founding Rigas family collected $3.1 billion in off-balance-sheet loans backed by Adelphia; it overstated results by inflating capital expenses and hiding debt. Adelphia Communications (ADELQ) Bristol-Myers Squibb (BMY) Inflated its 2001 revenue by $1.5 billion by "channel stuffing," or forcing wholesalers to accept more inventory than they could sell to get inventory off Bristol-Myers' books.
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Module 1 I Framework for Analysis and Valuation 1-20 continued from prior page Enron Created profits and hid debt totaling over $1 billion by improperly using off- the-books partnerships; manipulated the Texas power market; bribed foreign governments to win contracts abroad; manipulated California energy market. Engaged in network capacity "swaps" with other carriers to inflate revenue; shredded documents related to accounting practices. In 2011 Q2, beat the consensus earnings forecast by a wide margin due to recording an unusual negative accrual for sales returns of over $22 million. Improperly booked $100 million in annual construction cost overruns before customers agreed to pay for them. Inflated revenue using network capacity "swaps" and improper accounting for long-term deals. Markedly increased its allowance for uncollectible accounts in a year when earnings were high; in subsequent years when earnings were low, reversals of the allowance allowed it to prop up earnings at a time when losses in its credit card unit were soaring. As the ad market faltered and AOL's purchase of Time Warner loomed, AOL inflated sales by booking revenue for barter deals and ads it sold for third parties. These questionable revenues boosted growth rates and sealed the deal. AOL also boosted sales via "round-trip" deals with advertisers and suppliers. Overstated cash flow by booking $11 billion in operating expenses as capital costs; loaned founder Bernard Ebbers $400 million off-the-books. Global Crossing (GLBC) Green Mountain Coffee Roasters (GMCR) Halliburton (HAL) Owest Communications International (Q) Sears Holding Company (SHLD) Time Warner (TWX) World Com Accounting standard setters walk a fine line regarding choice in accounting. On one hand, they are concerned that choice in preparing financial statements will lead to abuse by those seeking to gain by influencing decisions of financial statement users. On the other hand, standard set- ters are concerned that companies are too diverse for a "one size fits all" financial accounting system. Enron exemplifies the problems that accompany rigid accounting standards. Aset of account- ing standards relating to special purpose entities (SPEs) provided preparers with guidelines under which those entities were or were not to be consolidated. Unfortunately, once the SPE guidelines were set, some people worked diligently to structure SPE transactions so as to narrowly avoid the consolidation requirements and achieve off-balance-sheet financing. This isjust one example of how, with rigid standards, companies can adhere to the letter of the rule, but not its intent. In such situations, the financial statements are not fairly presented. When financial statements are
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