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$1.00 Acc260 wk2 assignment, Plz help?
- From Business: Accounting , Business: General-Business
- Closed, but you can still post tutorials
- Due on Aug. 09, 2009
- Asked on Aug 09, 2009 at 3:43:57PM
Q:Assignment: The Enron and WorldCom Scandals
• Resource: Business & Professional Ethics
• Due Date: Day 7 [Individual forum]
• Review the accounts of the Enron and WorldCom scandals in Ch. 2 of the text:
o Enron’s Questionable Transactions on pp. 96-107
o WorldCom: The Final Catalyst on pp. 114-118
• Answer the following questions using complete sentences:
o Enron: 1, 3, 5, 6, and 9 on pp. 106-107
o WorldCom: 1, 3, 4, and 5 on p. 118
• Post your answers as an attachment. Clearly label the case and question number for each of your responses.
Enron p. 96 – 106
1. Which segment of its operations got Enron into difficulties?
3. Did Enron’s directors understand how profits were being made in this segment? Why or why not?
5. Ken Lay was the chair of the board and the CEO for much of the time. How did this probably contribute to the lack of proper governance?
6. What aspects of the Enron governance system failed to work properly, and why?
9. Identify conflicts of interests in:
• SPE activities
• Arthur Andersen’s activities
• Executive activities
WorldCom p. 114 – 118
1. Describe the mechanisms that WorldCom’s management used to transfer profit from other time periods to inflate the current period.
3. How should WorldCom’s board of directors have prevented the manipulations that management used?
4. Bernie Ebbers was not an accountant, so he needed the cooperation of accountants to make his manipulations work. Why did WorldCom’s accountants go along?
5. Why would a board of directors approve giving its Chair and CEO loans of over $408 million?
