![]() ![]() The following passage from the book captures Enron’s mindset: Wall Street analysts did not dig too deep because Enron was a massive source of investment banking revenue, its auditor signed off on everything because accounting was a loss-leader for their much more lucrative consulting practice and neither Enron’s board of directors nor the rating agencies that rated its debt cared to peek under the hood. And the system of checks and balances that were supposed to prevent such frauds were corrupted by conflicts of interest within the gatekeepers. Enron’s published financial statements were completely divorced from its underlying business economics. No other company had ever committed such a massive accounting fraud. In The Smartest Guys in the Room: The Amazing Rise and Scandalous Fall of Enron ( Amazon,) Bethany McLean and Peter Elkind chronicle the rise and fall of Enron.īefore the sub-prime crisis and Lehman Brothers bankruptcy, Enron was the poster child of greed gone wild. ![]()
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