Accounting of Enron

In recent months the rules regarding special purpose entitles have come under great scrutiny. Special purpose entities allow firms to raise debt while at the same time making it almost impossible for investors to determine the actual amount of debt exposure. ("Special Purpose Entities are Often a Clever Way to Raise Debt Levels") Thus was the case with Enron, which collapsed in 2001 when their fraudulent accounting practice were exposed. The purpose of this discussion is to investigate which accounting practices were violated as it relates to the SEC rules on Special Purpose Entities and full disclosure. We will also discuss the ethical issues that the company made regarding the firms' accounting practices.

Special Purpose Entities and the SEC Rules that Enron Broke

Special Purpose Entities are also called the securitization of debt. They are totally legal and most companies use them for legitimate reasons such as...
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