The Nature of the Enron Scandal: Special Purpose Entities (SPE) A Special Purpose Entity, or “SPE/SPV”, is also referred to as a “bankruptcy-remote entity” whose operations are limited to the acquisition and financing of specific assets. The SPV is...
The Nature of the Enron Scandal: Mark-to-Market Accounting When Skilling joined Enron, he immediately called for change in the accounting method from the traditional “historical cost” to “mark-to-market cost”. This innovative change is so inherently tied to Skilling...
The Nature of the Enron Scandal: Revenue Recognition The Enron scandal cannot be attributed to just one type of financial scheme or even just one person. Rather, it was an amalgam of complex events that contributed to the company’s eventual collapse. So complex, in...
The Writing on the Wall: Early Enron Scandals Financial scandals ensued almost immediately at the newly dubbed Enron Corp. In 1987, two oil traders at the subsidiary Enron Oil Corp. were found to be diverting company profits to a Channel Islands account for personal...
Part 3 Public Policy & Section 953 While, on its face, this section may seem to add a noble measure of transparency to a corporate world filled with executive excess and greed, in actuality, this measure is misplaced and ineffective. In order for the enhanced...