Enron Scandal
Enron’s downfall began when investors learned the company was hiding billions of dollars in this.
What is debt?
Before its downfall, Enron was best known for trading this type of commodity.
What is energy (or natural gas, electricity, and oil)?
The act passed by Congress following the Enron Scandal
What is the Sarbanes-Oxley Act
He was the Founder and CEO of Enron and was charged with fraud conspiracy (Hint: he died)
Who is Kenneth Lay
Recording assets at their current air market value instead of their original cost (book value)
What is Mark to Market (MTM) accounting
This accounting technique allowed Enron to count potential future profits as if they were current income.
What is mark-to-market accounting?
Enron’s headquarters were located in this Texas city.
What is Houston
The board that assures audit quality in Canada
What is the Canadian Public Accounting Board (CPAB)
This former Enron President & COO was sentenced to 24 years
Who is Jeffrey Skilling
Enron used this technique to report projected profits from deals that never actually made money
What is recording unrealized future gains using MTM
Enron’s stock price dropped from around $90 per share to less than this amount once the scandal broke.
What is $1 (or less than $1)?
Enron was repeatedly named America’s Most Innovative Company by this magazine for six straight years.
What is Fortune Magazine
Accounting standards were established to provide guidance on principles regarding ____________
What are variable interest entities?
As Enron’s CFO he masterminded the SPVs
Who is Andrew Fastow
These separate legal entities were used by Enron to hide debt and toxic assets from investors and creditors
What are Special Purpose Vehicles (SPVs)
Enron filed for bankruptcy in this year, marking the largest corporate failure in U.S. history at that time.
2001
The name “Enron” was created as part of a rebranding effort following the merger of these two companies.
What are Houston Natural Gas and InterNorth?
This principle of the SOX aimed to __________ by improving the accuracy and reliability of corporate disclosures
What is protect investors
The auditing firm was found guilty of obstructing justice for shredding documents
What is Arthur Andersen
In 1997, Enron entered a 20-year deal with this company
What is Blockbuster
Enron filed for bankruptcy in this month, marking the largest corporate failure in U.S. history at that time.
December
Enron’s aggressive innovation earned it this title from Fortune Magazine for six consecutive years.
What is “America’s Most Innovative Company”?
The _______ was updated to cover topics such as gifts and hospitality.
What is the CPA Code of Conduct
The fallout from Enron’s bankrupting caused investors to lose______
What is $60 billion
Majority of SPEs were ______ that only existed on paper
What are private corporations