The August 2, 1999, edition of Fortune presented numerous articles on accounting irregularities and fraud. One article entitled "Lies, Damned Lies, and Managed Earnings: The Crackdown Is Here" discusses the implications of unethical managerial decisions. You can access a portion of the article on the Libby/Libby/Short website at www.mhhe.com/libby4e.*

Required:

Read the article and then answer the following questions: 1. What is the SEC and what is its role? (Refer to Chapter 1.) 2. What are the four criteria for recording revenue under the revenue realization principle? 3. What fraudulent activities were committed by the three companies mentioned in the article? What accounting concepts were violated in each case?