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Summary Course Project.docx (2) ACG2680 Financial Investigation Rasmussen University A276/ACG2680 Financial Investigation The fraudulent activity Enron performed in simple words was keeping liabilities off the balance sheet so that financial statements lo$7.49
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Summary Course Project.docx (2) ACG2680 Financial Investigation Rasmussen University A276/ACG2680 Financial Investigation The fraudulent activity Enron performed in simple words was keeping liabilities off the balance sheet so that financial statements lo
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Course P (2) ACG2680 Financial Investigation Rasmussen University A276/ACG2680 Financial Investigation The fraudulent activity Enron performed in simple words was keeping liabilities off the balance sheet so that financial statements look good. This act allowed for Enrons stock price to inc...
course projectdocx 2 acg2680 financial investigation rasmussen university a276acg2680 financial investigation the fraudulent activity enron performed in simple words was keeping liabilitie
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ACG2680
Financial Investigation
Rasmussen University
A276/ACG2680 Financial Investigation
The fraudulent activity Enron performed in simple words was keeping liabilities off the
balance sheet so that financial statements look good. This act allowed for Enron’s stock price to
increase year over year and maintain good investment credit ratings. To keep liabilities off the
balance sheet Enron’s executives started to establish special-purpose entities where liabilities
were placed. This is generally allowed by GAAP, but companies must consolidate liabilities to
one financial statement and Enron did not.
Enron filed bankruptcy early December 2001. It became the largest Chapter 11
bankruptcy ever recorded before WorldCom. An approximate 4,000 jobs were lost, and
thousands of employees lost their pensions and 401k because they were tied to Enron’s stocks
(Thomas, 2002). The total loss was more than $60 billion dollars.
The main key players were indicted for numerous counts of accounting fraud. Most of
the people involved were part of the executive. These people included the CEO, CFO, and
founder/Chairman of the board. They were all found guilty of fraud and sent to prison for many
years. The audit firm Enron used to review their financial statements was also prosecuted. The
charges were for obstruction of justice. According to an Arthur Andersen, LLP V. United States,
Andersen was accused of destroying evidence that would implicate Enron’s accounting fraud.
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