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Detecting Accounting Fraud 1st Edition by Cecil Jackson
Edition 1ISBN: 978-0133078602Detecting Accounting Fraud 1st Edition by Cecil Jackson
Edition 1ISBN: 978-0133078602 Exercise 41
Which of the following was not a signal in Enron's financial statements of its financial problems? (a) Receivables increased as a percentage of sales.
(b) Its debt-to-equity ratio decreased over time.
(c) It used death-spiral financing in which it guaranteed that if Enron's stock fell below certain specific amounts, it would issue more shares or pay cash to SPEs.
(d) All of the above were signals.
(b) Its debt-to-equity ratio decreased over time.
(c) It used death-spiral financing in which it guaranteed that if Enron's stock fell below certain specific amounts, it would issue more shares or pay cash to SPEs.
(d) All of the above were signals.
Explanation
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Special purpose entity (SPE)is that busi...
Detecting Accounting Fraud 1st Edition by Cecil Jackson
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