Detecting Accounting Fraud 1st Edition by Cecil Jackson

Exercise 39

For which of the following purposes did Enron not use its investment in Empressa Productura de Enerain (EPE) and the off- balance-sheet entity LJM1? (a) To enter into a contrived sale of a percentage of Enron's ownership in the Cuiaba Power Plant to LJM1.
(b) To cause EPE to obtain a loan from a bank and divert the funds to Enron.
(c) To use mark-to-market accounting to revalue its investment in the Cuiaba Power Plant by reference to a contrived sale of a percentage of Enron's ownership in the Cuiaba Power Plant to LJM1.
(d) To buy back Enron's stake in the Cuiaba Power Plant from LJM1 after having recorded profits on the earlier sales of parts of its stake in the power plant to LJM1.