Question
Which of the following assertions regarding Enron's demise is true? A. Enron employed Special Purpose Entities (SPEs) to make it look as though important risks
Which of the following assertions regarding Enron's demise is true?
A. Enron employed Special Purpose Entities (SPEs) to make it look as though important risks were hedged (covered) by outside parties, which allowed it to hide significant losses from the market.
B. Because they were worried about losing out on potentially significant audit/accounting fees, Enron's external auditors (Andersen) did not press the directors sufficiently on the aberrant activities of SPEs, which ultimately led to Andersen's downfall.
C. Enron seems to emphasize the need of directors' honesty and integrity, as well as the need for independent directors on boards and committees.
D. Only statements A and C are correct.
E. Statements A, B and C are all correct.
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