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Smoke and Mirrors on Wall Street. The court-appointed examiner of the Enron bankruptcy condemned the accounting techniques repeatedly approved by Enron's auditors, Arthur Andersen LLP and Enron's other advisors. The financial institutions that had long supported Enron relied on the troubled energy giant, its accountants, and advisors to report these transactions properly.

The examiner has been asked by U.S. Bankruptcy Court Judge Arthur J. Gonzalez, supervising Enron's bankruptcy, to determine the degree of blame that Enron's accountants should bear for the spectacular financial failure.

 

It is alleged that Enron violated generally accepted accounting principles (GAAP) with the help of its advisors. These advisors allegedly knew Enron was misrepresenting its transactions in its own annual reports. The report alleges that transactions were structured so that the receipt of loans were recorded as income, artificially enhancing the Enron financial picture.

 

Is this a case of negligent misrepresentation? Fraudulent? By whom and to whom?

 

 

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