Recent Corporate Scandals Involving the Misrepresentation of Financial Information Such

Multiple Choice

Recent corporate scandals involving the misrepresentation of financial information such as Enron Corp. and WorldCom had which of the following consequences?

A) Stockholders and investors of these companies were hurt by the loss in the value of their holdings.
B) The efficiency of financial markets was jeopardized as capital continued to flow to these industries.
C) Competitors in the same industries were hurt as they tried to match operating results that were not real.
D) The companies involved went bankrupt as their own reporting systems could no longer help them manage the business.
E) All of the answers are correct.